Copyright © PRYME HOMES

The Ultimate 
Guide To 
Flipping Houses Successfully

Flip Houses With Confidence
Learn how to really flipping houses really works from real investors. We hold nothing back! We cover everything we have learned while flipping houses and growing our investment business.
Why Flipping?


We like to start by stressing how important mindset is when flipping houses. Many people underestimate the mindset that is required to succeed in flipping houses. 
This usually leads them to losing a lot of money and failing in their journey.

Who Is Flipping Houses For?

Flipping houses is for someone that loves real estate!

Flipping houses is a FULL-TIME job. This is why you need to love it. You should love everything you do in life. After all we only get one to live. 

Flipping is not an exception.

This business is very hard and extremely stressful. 

Please don't think for one moment that this is not a business. You MUST run it like one at all times. 

As a business, there are a lot of parts of it that are extremely boring but must be done. This is why loving what you do matters.

The musts:

You must be willing to roll up your sleeves when a deal goes bad.
You have to be prepared to drive all over town to buy materials.
You must be ready to check on your projects everyday.
You must be ready to fire your contractor a week before the job needs to be done.
You must be ready to personally manage every project.
You must be ready to run your own books.
You must have a background in investing in real estate or a great partner.
We will break down all of these musts as we go through this guide.

Who is flipping houses NOT for

This is not for people that think this is easy money. We see many people get into flipping because they think they will be rich! If you're getting into this business because of money, trust us, there are easier ways. 
This not for people who already have a full-time job. You need to be ready to go put out any fire at any given time of day. We mean metaphorical fires, real fires should be handled by the fire department.
This not for you to live your HGTV fantasies! We get that you watch the shows and they make it seem like it's easy. That even though everything goes wrong they still make money.
Real life doesn't work like that. Sometimes things go wrong and you can lose tens of thousands of dollars.


There are 3 main parts to every deal.

#1 The Experience

If you're new to flipping then you MUST get an experienced partner. By experienced we mean someone who has actually flipped houses successfully.
Many people think that all they need is a contractor. This is wrong.
Being that the partner you need has experience in flipping houses you have two things to offer.

1- Money. Here you have to money to either buy the house, do the rehab, or maybe both.

2- The Deal. Here you found a great deal to partner with someone that has the experience.

If you can't offer one of the two then no one will want to partner with you.

The difference between a contractor and 
an investor.

A contractor, even a great one, is only good at being a contractor. This means that they know HOW to fix things.

The investor on the other hand knows WHAT and WHY certain things need to get fixed. We've seen many investors get in trouble for doing what the contractor thought needed to be done.

You should only hire a contractor to do the work. An investor should determine what that work is.
#2 The Money
Once you found the experience to be able to handle a flip you need money.

This does not mean the money needs to be yours.

We built PRYME Homes by partnering with a lot of investors that have money. We would combine our knowledge and resources with their money to get deals done. Now, we have many investors willing to lend to us for any deal we want to do.

Lets go over the different sources of money you may be able to use.

1- Hard Money Loans (HML)

2. Individual Investors

3. Partnership

The last way to get money is through a partnership. Like we said above, our first lender was actually a partner. We had found a great deal. He had already bought a couple wholesale properties from us in the past. This had helped him know that we are very transparent and know what we're doing.

But, this didn't prove flipping experience. 

It was because both of us have extensive construction experience that he felt comfortable enough to do 50/50 on it. 

Now, this is VERY expensive money. We could have gone through the HML route but we really wanted to build a relationship with him.
He was more than happy to split the deal 50/50 when all he had to do was lend money. 

Of course his money is 100% protected by the property which we bought for 50% of value.

After he saw what we're capable of and we negotiated a 2 point and 12% loan for the next one. 

After this his friend heard about and he came in at 1 point and 12%. Then another investor found out and so on. 

Now we borrow money at 8% interest only paid in the back end!
NOTE: When borrowing money we rather do more interest and less points. Here's why, interest payments are spread over 12 months. Points are paid upfront. So when we negotiate with a lender we try to go up on interest and down on points.

#3 The Deal

Finding the deal is the last part to the 3 things needed to flip a property.
You can do this 3 different ways.


Now that we have covered the 3 things needed to start a flip let's cover the actual flip.

Scope Of Work (SOW)

When flipping houses the biggest most important part is making sure you have a detailed Scope Of Work.

1. Helps get detailed bids from contractors.

When hiring a contractor, GC (General Contractor) or a tradesmen, they need to clearly understand what must be done.

Many contractors will give you a low bid and say yes I can do a new kitchen. But then the change orders come when that bid didn't include the installation of the appliances. Or maybe they "forgot" to include the install of the hardware on the doors.

You may think that we're kidding. We're NOT! We're not trying to say that all contractors are terrible people. The problem is that many people claim to be contractors when they're really not. 

They're simply overpaid handyman.

A detailed bid can help you prevent this headache. This is where having an experienced rehabber can help tremendously. You must go through every room and clearly detail what must be done. 

You have almost be redundant. If the blinds need to be removed you need to specifically say "the blinds and any hardware". If not they will only remove the blinds!

2. Helps keep the project on track.

Sometimes these projects can take 6+ months. If you have multiple projects going on it's very easy to forget some details. 

You may be at the end of a project and realized that you didn't order a shower door that takes 3 weeks to get here! True story.

3. Helps when paying contractors.

A detailed SOW is very useful when determining pay schedules. All of our contractors get paid when a particular scope has been completed. This also helps for to go in an check their work. You never want a contractor to either bounce around or get too ahead of themselves. 

It also helps you keep track of what you're paying for certain SOW so you know for next time.

4. Helps with the budget and time.

On every project, you MUST keep a close eye on your budget. It's very easy to lose track of the budget towards the end. Many investors only think about the big-ticket items. But they forget the little things towards the end. 

We've spent over $1000 at times buying little finish touches at Home Depot. These little things can add up to $10K very quickly.

With time and experience, if you tracked everything, you will get more efficient at estimating SOW and timelines. This helps tremendously when borrowing money and bidding projects.

NOTE: Don't forget to factor in holding costs. This includes but it's not limited too money cost, insurance, taxes, utilities, and lawn maintenance. 

Hiring A Contractor

Now, that you have a very detailed SOW, you can proceed to hiring your contractor(s).
You have two options here:

1. Hire a GC

When flipping houses hiring a GC is one the preferred method for many new investors. They believe because it's just one person they need to deal with it'll be easier. We understand why this is appealing but there's a very big issues with this.

When you're hiring a GC you're essentially hiring someone to manage your renovation. This can cost you north of 20% of the rehab budget. To us that's A LOT of money. Especially when you working with tight deals.

Most GC's now-a-days don't actually work. They instead hire the people that do the job and add on their management fee to the price.

Other than being expensive, some GCs tend to jump around the project a lot. They start something in one room then jump and do something else in another room. The issue here is that many times they miss little things because they're jumping everywhere.

We've also seen that many GCs actually rarely go to the projects. When your flipping houses a project must be visited on a daily basis. This keeps the subs from messing something up that will now cost more to fix because they covered it up.

2. Hire individual tradesmen

At PRYME Homes we do this 98% of the time. There are a couple reasons why we like this so much:
Save money of the GC fee. We completely cut out the GC which means we get the job done at cost. This alone can save you tens of thousands of dollars when flipping houses.
Control of the project. We can control who does what and when. This is crucial to making sure everything stays on track. We can schedule all of the contractors so everything flows.
Replace contractors. If you hire a GC, it's harder to replace them because they tend to jump around on the SOW. But with a tradesmen, you can replace them just for their SOW.
When flipping houses speed is everything. For many investors, you have money you've borrowed and are paying interest on. If you hired a GC that has a small crew this can delay your project a lot. In a small crew everyone does everything. This makes it really hard to do more than one scope at a time.

The downside. Hiring individual tradesmen requires more work. 

You have to find them. This means calling around, asking for referrals, going to other peoples projects. 

Even after you found some "good" tradesmen, you have to keep looking because they may not last. Ever since we have been renovating houses we have needed new tradesmen after each project. Sometimes they only last one project. Other times, we need a different skill level.

There's no "one size fits all" tradesmen. If you have a great worker for high-end tile jobs they may be too expensive for lower-end. We don't use the same workers for a $500K house as we do for $150K house.

Once you find them, now you have to manage them!

Managing Contractors

There are two areas to managing contractors. This is the same for either GC's or tradesmen.

1. Managing Expectations

This is big! Many investors are not clear on what they expect from a contractor when they're flipping houses.

What we mean by this is, being clear on what you expect the finish product to look like. We know, you're probably thinking, "I want the finished product to be finished!".

We get it. But you can't assume that they're interpretation of "finish" is the same as yours.

We're more demanding of our contractors than other people are. We expect the corners of every trim piece to be even. We expect that all flooring go under the door jams. We expect our tubs to be covered so they don't get scratched or dented and much more.

You have to eliminate all guessing from their heads. You want to make sure you both see the same finished product.

2. Managing the SOW

It's not enough to just give them the SOW and "hope" they do it right. We go to our projects daily! This helps us make sure that they're not jumping around.

We also can check on quality this way. If you go daily you can see something that just got done wrong but can be fixed. If you're like so many investors we've met and go once a week, it may cost a lot more to fix things.

Managing the SOW also helps in determining if you're ahead or behind schedule. Again, remember staying on schedule is important because of holding costs.


Hopefully by now everything went great and you're getting ready to sell this amazing renovation!

This part is NOT the easy part. Many investors overlook this part when flipping houses.

There are a lot of things that must be done in order to sell for the most and the quickest.

Let's start with the right price.

Pricing To Sell

There are two things to consider when pricing a house.

1. Appraised Value

Appraised value is what will the home appraise for when a lender sends an appraiser to your home. This is very important because, if it doesn't appraise it may not sell.

An appraiser will look at similar homes to yours and start comparing apples to apples. They will make adjustments if things don't match up exactly. Like an extra bedroom or bathroom or maybe updated cabinets. Once they have made all of their adjustments they come up with a value to your home.

This is very important. If your house is similar to other renovated homes but you price it $10K higher, it won't appraise. Updated cabinets are updated cabinets. It doesn't matter if theirs is off the shelf from Home Depot and your's are custom. 

When appraiser looks at other properties he looks at pictures. 

So they can't tell if the quality is cheap.

2. Perceived Value

This is the value that a new homeowner will put on your house.

If they go to a house and feel like they're getting a deal that's great. If they go and feel like it's overpriced that's bad.

A higher perceived value from your buyers will help sell faster, not necessarily for more. This is why you don't want to over-improve the house.

Typically what we do when deciding finish out materials is look at the COMPS. Here we determine the Appraised Value first. Once we did this we now look closely at all of the SOLDS. Here, we're looking for minor updates we can do to stand out. We know that by doing XYZ we will appraise for max ARV. But, what do we need to do to sell for max ARV and fast? That's where you make little tweaks that a homeowner will love.

The Details That Sell

Appraisers don't look at the details. They look at pictures. If you have new cabinets and the comp appears to have new cabinets then that's it. It doesn't matter if your cabinets are custom. 

But, custom cabinets may help sell it faster. You obviously need to keep cost in mind.

Finishing touches

The details that sell are for the homeowner not the appraiser. Now, you need to walk through the house and look at it as a homeowner. 

Do you need to put blinds on the windows? 
Do you need nicer landscaping? 
Should you stage it?

A homeowner will walk in and picture themselves living there. If they see they still need to do more stuff to finish it out they may not like it. 

The majority of buyers don't know how to install blinds. So now they're thinking they need to hire someone to do it.

Staging is so important when flipping houses. Good staging will make the buyer feel right at home. They can see where the couches go. They can visualize their furniture there.

We stage every house we flip. The reason for this is speed of sell. The house looks completed and therefore sells faster.

The pictures

When you're going to sell you will list it with an agent. 

Please spend the extra $100-$200 or so to get professional pictures taken. Buyers shop for houses online. If they come across yours and your pictures are from a phone that won't look good.

We seen beautiful rehabs with terrible pictures. The issue with this is it gives the house a bad feel. They usually look darker and smaller.

Professional pictures makes your $50K rehab look like a $100K rehab. I brightens the home up. Makes every room look huge. It really grabs their attention.

If you grab their attention online then when they show up to the house they're more excited. Now, if you don't do this and they see dark pictures they may feel different. Now, they're going to the house curious to see what's wrong with it.

Multiple Offers

Many investors think that when flipping houses you go for the highest offer. This really depends on the offer.

You may get an over asking price offer but it's FHA or VA. This means that if the house doesn't appraise for that extra amount they won't get the loan. This is an issue because by the time they are notified they can't afford it you have lost weeks.

Always look at the terms. Is the offer contingent on anything?

Many times they submit an offer contingent on their home selling. This isn't a big problem if they are already under contract to sell. But, if they haven't even begun to sell their home then it could take months. You don't want to go under contract for months. Also, what if it doesn't sell? Now you have a BOM (Back On Market) on your listing.

A listing that went from ACT (Active) to AO (Active Option) to BOM doesn't look good. To most buyers they're thinking, "what's wrong with the house?". This is terrible for you.

We have sometimes taken a lower offer because the terms were better.

Choosing The Right Agent

Many investors flipping houses try to go for the cheapest agent. This is NOT the time to save money. A good agent can not only sell your house fast but also solve any problems that come up.

There have been so many times when we have had to teach the buyers agent how to close a deal! If not they would have lost their buyer which means we lose too!

Nowadays everyone wants to be a real estate agent. Most agencies will add any new agent to their team. So, if you thought that because it's a big name realty you're good, think again.

The best way to find a great agent is to go to local investors and see who they use. Then interview a couple of them to see which one you feel more comfortable with.

You also want to make sure they are familiar with that area of town. In San Antonio we have many different areas of town. This means that there may be different issues that arise.

You don't want an agent that deals in high-end homes selling a starter home. The commision isn't the same for them and sometimes they're not as motivated.

There are really good agents that can adapt to any area, but they're not easy to find.


We hope we've given you enough to succeed with flipping houses.
Keep in mind this is not easy nor is it for anyone. But if done right, it can be very fun and rewarding.
Please keep checking back with us as we continue to add more articles. We will continue to expand on many of these topics even further.
Good luck on your journey and hope you share your success stories with us.
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