FlippingThe

House flipping basics

How a house flip works, from first walkthrough to final sale

Flipping means buying a house, renovating it and selling it. This guide explains each stage in plain terms, so you know what questions to ask and which professionals to ask them.

Small older house with a fresh coat of white paint and a brick red front door, ladders and sawhorses on the lawn

What a flip involves

A house flip has three parts that each carry their own work and their own risk. You buy a property that needs work. You plan and carry out a renovation, usually with licensed contractors and permits from the local building department. Then you sell the finished house, often through a real estate agent.

Each part depends on the one before it. A rushed evaluation leads to surprises during the renovation. A vague renovation scope leads to a budget that keeps growing. A long renovation means more months of loan payments, insurance, taxes and utilities on a house nobody lives in. The guides on this site walk through those links one stage at a time.

01

Evaluate the property

Location, structure, systems and paperwork, looked at before you commit.

 02

Plan the scope

Decide what changes, room by room and system by system, and write it down.

 03

Get the permits

How the local building department fits into the project and why it matters at sale.

 04

Budget by category

Buying, renovating, holding and selling costs, plus a contingency for the unknown.

 05

Map the timeline

The phases in order, and the steps that tend to slow a project down.

 06

Know the risks

Hidden damage, cost overruns, market shifts and the rest, with ways people reduce them.

Scope, drawn room by room

The plan below is a made-up house. Each room is shaded by how deep the work goes, from cosmetic updates to major changes in plumbing, wiring or layout. Select a room to jump to its scope notes. The same thinking applies to the whole-house systems listed underneath, which often matter more to a buyer's inspector than any finish you choose.

Sample planScope by room

Sample house plan with each room shaded by renovation scope level Kitchen: Major scope1KitchenDining: Cosmetic scope2DiningLiving room: Cosmetic scope3Living roomBedroom 1: Cosmetic scope4Bedroom 1Bathroom: Major scope5BathroomHall and laundry: Moderate scope6Hall and laundryBedroom 2: Moderate scope7Bedroom 2
  • Cosmetic Surfaces and finishes. Paint, flooring, fixtures, hardware.
  • Moderate Some parts replaced in place. Cabinets, doors, a new vanity, minor repairs.
  • Major Systems, layout or structure change. Moved plumbing, new circuits, opened walls.

  1. 1KitchenMajor

    • Cabinets and counters
    • Sink and faucet location
    • Appliance circuits and venting
    • Flooring and lighting

    Moving a sink, adding circuits or changing gas lines usually needs a permit.

  2. 2DiningCosmetic

    • Paint and trim
    • Light fixture
    • Flooring to match the kitchen

    Paint and flooring often need no permit, but check local rules.

  3. 3Living roomCosmetic

    • Paint and patching
    • Flooring
    • Window condition
    • Outlets and switches checked

    Replacing windows may need a permit in some areas.

  4. 4Bedroom 1Cosmetic

    • Paint
    • Closet doors
    • Flooring
    • Smoke alarm location

    Cosmetic work. Alarm rules vary by city and state.

  5. 5BathroomMajor

    • Tub or shower and waterproofing
    • Vanity and toilet
    • Exhaust fan to the outside
    • Hidden water damage below

    Plumbing, electrical and fan changes usually need a permit.

  6. 6Hall and laundryModerate

    • Washer hookups and drain
    • Dryer vent route
    • Hall flooring

    New hookups or a rerouted dryer vent may need a permit.

  7. 7Bedroom 2Moderate

    • Door and trim replaced
    • Ceiling stain traced to its source
    • Flooring

    Repairs that open the ceiling or roof may need a permit.

Whole-house systems

  • Roof and guttersMajor
  • Foundation and drainageMajor
  • Electrical service and panelMajor
  • Water supply and drain linesMajor
  • Heating and coolingModerate
  • Water heaterModerate
  • Exterior paint and sidingCosmetic
A made-up house used to show how scope is planned. Real scope comes from the inspection and your contractor's walkthrough.

Before you start

Flipping is a business decision with real money at stake, and outcomes vary a great deal. Some projects lose money. Nothing on this site predicts a result or tells you whether a particular deal makes sense for you.

General information only. For decisions about money, financing, taxes, contracts or property law, talk to licensed professionals: a real estate agent or appraiser for local values, a lender for financing, a CPA or tax professional for taxes, and a real estate attorney for contracts. The team page explains who does what.

If you are new to renovation, it helps to start by learning how inspections work and how to read a report. The inspections guide covers that, and the glossary explains the terms you will hear from contractors, lenders and title companies.

Common questions

Do I need a license to flip a house?

Buying and selling your own property usually does not require a real estate license, but rules differ by state, and doing your own renovation work can require trade licenses or owner-builder permits. Ask your state licensing board and local building department, and a real estate attorney if you are unsure.

Can I do the renovation work myself?

Many places let owners do some work on their own property with a permit, while electrical, plumbing and gas work often have stricter rules. Even where it is allowed, the work still has to pass inspection. Check with your building department before you pick up a tool.

Does this site say how much profit a flip makes?

No. Results depend on the house, the market, the work and the costs along the way, and they can be negative. We explain the parts of a flip so you can ask better questions of the people who can see your numbers.