Flipping houses can be a great way to make a living, as it provides unlimited earning potential and freedom to run your own business.
However, many first-time house flippers often wonder, if they need to quit their job to flip a house?
The answer to this question is:
No, you do not need to quit your job to flip a house. In fact, it’s usually not a good idea to quit your job when first starting out as a house flipper, as this can often lead to a lot of additional stress and pressure and can even be the downfall of your house flipping business.
Why You Shouldn’t Quit Your Job to Flip a House (At First)
To really understand why it’s not a good idea to quit your job though when you first start flipping houses, we need to take a closer look at the actual house flipping process as well as the house flipping business in general.
Typical House Flipping Timeline and Why You Need that Day Job
The great thing about that job is like clockwork that steady paycheck rolls in once a week or every other week, which most people rely on and need to live their day-to-day life and pay their bills.
However when you start flipping houses the days of a steady paycheck quickly become a distant memory.
This is because when you start flipping houses the only way you make money is when you complete a successful house flip, which on average will usually take anywhere from 4 to 6 months.
So unless you have a lot of money saved up and can go an extended period of time without a paycheck, you will need that day job to keep some sort of money coming in to pay your bills.
House Flipping and Money
House flipping is also a very capital intensive enterprise that requires a lot of capital and money to successfully complete.
As you will need the money not only to purchase the property but also the money to rehab the house and carry the property while you’re flipping the house and waiting for it to sell.
And because of this, eliminating your only source of actual income, a.k.a. your job, is usually not a good idea.
Because not only will your job pay your day-to-day bills while flipping the house but it might also provide some of the needed capital you may need to rehab and carry the property until it sells.
Flipping Houses is Investing and There are No Guarantees
While it’s true you can make a lot of money flipping houses, you can also break even when flipping houses or even lose money.
This is because flipping houses is a form of investing and just like any other type of investment, there is no guarantee it will be successful or that you will make money.
So even if you buy a house to flip, spend months rehabbing the property, get it on the market, and successfully sell the property.
You might not make as much as you thought you were going to or make any money at all.
Because while the process of flipping a house is pretty simple: buy a house for cheap, fix it up, and sell it for more money than you have invested.
The execution of this simple process is not always easy and there can be a real learning curve, especially when first starting out.
So having that job can go along way in making sure your bills are paid even if the flip doesn’t work out the way you had hoped.
And can give you the ability to dust yourself off and get back out there and try again if your first flip didn’t go as planned.
Because as with most things in life, the more you do it, the better you will become.
Best Alternative to Quitting Your Job to Flip a House
The way I got started flipping houses and in my opinion, the best way to flip your first few houses is to flip houses part-time at first.
This is because flipping houses part-time allows you to keep your full-time job, which will not only pay your monthly bills but will also greatly reduce the amount of stress and anxiety that often goes hand in hand with your first few house flips.
For me, it was house flip number 6 before I finally felt comfortable enough to say “ok I know I can do this, and I can do it successfully”.
And that was also the number of houses that I had to flip to save up enough money to allow me to go months without a paycheck and still be able to pay my bills.
Downfalls of Flipping Houses Part-Time
If you plan to flip houses part-time though when first starting out, there are some things you need to watch out for, in order to make sure you don’t fall into the pitfalls of part-time house flipping.
- Watch Your Timeline – One of the biggest issues when flipping houses part-time is that it can often greatly extend the amount of time it takes to flip a house. So if you plan to flip your first few houses part-time, you need to set specific deadlines and timelines for the house flip to ensure that you stay on track.
- Don’t Get Complacent – It can be very easy to not give the house flip the priority it deserves when trying to flip a house and hold down a full-time job at the same time. So when flipping houses part-time make sure you set a schedule and stick with it, to make sure the work is getting done.
- Keep a Close Eye on Subcontractors – Just because you’ve turned over a particular job or some of the rehab to a subcontractor, don’t just assume there doing what they said they would do. As you need to routinely check-in to make sure things are getting done as they should be.
- Don’t Forget to Check on the Property Routinely – A lot can go wrong with a house flip that’s sitting vacant. So always make sure to check on the flip at least once every few days, even if you’re not working on the house that particular day, to make sure the home is locked up and secure and that there are no major issues going on with the house.
Can Flipping Houses Be a Full-Time Job?
Flipping houses can absolutely be a full-time job as there are tons of investors that have made house flipping their full-time job including myself.
As I am now over five years into flipping houses full-time and just completed my 16th house flip.
The important thing to remember though is that becoming a full-time house flipper doesn’t happen overnight for all the reasons mentioned above.
So if you want to become a full-time house flipper, you absolutely can but you need to allow yourself and your house flipping business enough time to get off the ground, which in most cases will usually take a few years.
But if your patient and put in the work, you can definitely flip houses full-time.
How Much Do House Flippers Make a Year?
Most people when first starting out flipping houses, have this grand vision of house flipping where they assume they will make millions of dollars and become rich from flipping houses.
And while this is possible and people have certainly made millions of dollars flipping houses and become rich while doing so, this is not by any means the norm.
Because the reality of house flipping is that you are far more likely to just make a living at it, all be it a good one.
And there are two main reasons for this including the average house flipping profit and how many houses you can flip in a year.
Average House Flipping Profit
When flipping houses there can be a wide range when it comes to profits. As it’s possible to make as much as $100,000 on a single flip or nothing at all and everything in between.
However, according to Attom Data Solutions, which is a multi-sourced national property database, the average gross profit on a house flip nationwide is $69,500.
Which at first glance might seem pretty good but the thing to keep in mind is that this number reflects gross profit and not net profit.
As this profit number does not take into account the cost of the rehab, carrying the property, or selling the property.
So in order to get a true picture of the average house flipping profit, you need to subtract all of these costs to reach the net profit of the house flip.
And as a full-time house flipper in the midwest, I can tell you that on average after it’s all said in done, we usually make around $30,000 in net profit per house flip.
How Many Houses Can You Flip in a Year?
While there is no limit to the number of houses you can legally flip in a year, there is a limit to the number of houses you can logistically flip in a year.
And while there are ways to speed the house flipping process up, by hiring out the labor and flipping more than one house at a time, the average real estate investor can expect to flip somewhere between 2 and 7 houses per year.
Because no matter how much you streamline the house flipping process and how quickly you flip a house, there will always be constraints such as lack of capital or lack of properties, that will prevent you from flipping more than a certain number of houses per year.
Putting it All Together
So now that we know the average net profit you can expect when flipping a house and the number of houses the average investor flips a year.
We can use these numbers, to figure out how much a house flipper makes a year.
Assuming that a house flipper averages $30,000 in net profit per flip and complete between 2 and 7 flips per year.
The average house flipper will make somewhere between $60,000 and $210,000 per year before taxes.
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