Real-Life House Flipping Examples Insights

House flipping can be a lucrative business when done right.

Experienced flippers have already encountered common flipping problems in their careers. This gives them a wealth of knowledge to help new investors avoid potential pitfalls.

By learning from successful house-flipping examples, as well as some flops, new fix and flip investors can gain valuable insights into the world of house-flipping.

In this article, we explore five real-life examples of house flipping to help you understand the process, risks, and rewards associated with this investment strategy.

Example #1—4-bed, 2.5-bath home transformed

• Amount paid: $315,000
• Renovation costs: $95,000
• Sale price: $485,000
•  Profit: $75,000

This 2250 sq. ft. home was built in ’93, but with a few updates and repairs, it’s now a 4-bedroom layout with a refreshed look.

Upgrades included new carpeting, paint, and an accent wall on the stairs. The upstairs bedrooms got a fresh coat of paint and minimal decor to keep it simple. The hall bath was simplified with new tiles, painted cabinets, and a new countertop, giving a clean, modern look.

The major renovation involved adding a new bedroom by putting up a wall, making it a 4-bedroom home. This wall made marketing easier and added value to the overall home. The primary suite was also updated, making it more comfortable and appealing to buyers.

In total, the project cost $390k, including the $75k that went into the remodeling, holding costs, and other expenses. By selling it for $485k, it yielded a net profit of $75,600 after closing costs.

Transforming a dated home into a profitable investment, now that’s a win!

Examples #2—Turning a $5,000 house into a major ROI

• Amount paid: $5,000
• Renovation costs: $93,000
• Refinancing ROI: 26.5%

Located in Brownwood, Texas, this property appeared far from salvageable.

Despite facing demolition threats from the city and heavy code violations, the team saw its potential as a profitable investment opportunity. After spending $93,000 to renovate the 3-bed, 2-bath 1100 square foot home, their total investment reached $98,000.

Following renovations, the property’s market value rose to an estimated $120,000. Their strategy was to refinance the property with a loan for 75% of its market value at a fixed 4% interest rate over a 30-year period.

This investment yielded a cash flow of $177 per month, taking into account their principal, interest, taxes, and insurance payments at $673 per month. To mitigate risk, they allocated $250 per month for vacancy and property maintenance.

Despite its modest upfront cost, the property’s success as a rental investment yielded an impressive 26.5% annual cash-on-cash return. The house flippers say this investment has proven to be a long-term asset with substantial growth potential compared to the current market.

Example #3—Making more than your day job

• Amount paid: $200,000
• Renovation/debt service costs: $62,000
• Sale price: $380,000
• Profit: $118,000

In another successful flip example, an investor purchased a fixer-upper property for $190,000.

He invested $50,000 in renovations, focusing on key areas like the kitchen and bathrooms to maximize the property’s appeal. The renovated home was sold for $380,000, generating a profit of $118,000, which is more than he used to make at his day job.

This straightforward example emphasizes the importance of prioritizing high-impact renovations that can significantly enhance a property’s value and attract potential buyers, and the power of flipping homes to replace your 9-5.

Example #4—Fix and flip goes up in flames

• Amount paid: $900,000
• Renovation costs: $150,000
• Sale: on hold
• Loss: ??

In what was supposed to be a typical fix-and-flip project, things quickly went wrong.

The purchase price was negotiated down from $950,000 to $900,000 due to the need for an estimated $150,000 in repairs. However, the project hit a major roadblock when a fire broke out, destroying the majority of the property.

The fire started upstairs, causing significant damage to each room, including the tiny kitchen typically found in apartments. Smoke damage was so severe that all of the plaster had to come down and new drywall would have to be installed throughout the entire house.

Unfortunately, the roof was also half gone, requiring a complete overhaul.

Despite an insurance claim being filed, the approval process was delayed, leaving the contractor at a standstill. Insurance investigators were still determining the exact cause of the fire and hence the extent of damage to be covered under the policy.

This is a prime example of how a renovation can turn ugly very quickly. Even with insurance, house flippers who are too leveraged financially could find themselves underwater quickly.

Example #5—Results in just 10 weeks

• Amount paid: $1M
• Renovation costs: $80,000
• Sale price: $1.4M
• Profit: $160,000

In the world of house flipping, speed is key and efficiency is everything. That’s why this flip stands out as a true success story.

In just 10 weeks, from purchase to sale, Elisa—a real estate developer in the Bay Area—was able to complete the project and secure a clean non-contingent offer for exactly her estimated after-repair value of 1.4 million dollars.

It wasn’t easy – unexpected market shifts made Elisa nervous and uncertain, but her dedicated team of contractors managed the project diligently, ensuring maximum efficiency and minimal waste.

With a profit of 160,000 dollars and a record-breaking completion time of just five weeks, this flip proves that when it comes to flipping and fixing, short and sweet is the way to go.

Will your flip be a success?

These real-life house-flipping examples provide valuable lessons for new fix and flip investors.

Success in this industry requires a keen eye for potential, strategic renovations, effective marketing, and realistic budgeting.

By learning from both successful flips and cautionary tales, aspiring investors can better navigate the world of house flipping and maximize their chances of achieving a profitable outcome.