House Flipping with Financing

[Marcel C.]

Hey Everyone! I was hoping to gather some advice on whether or not this plan is solid or needs some additional work. I currently own 3 homes. 2 are rentals and 1 of course is my primary. My cash flow on the 2 rentals is roughly 700/mo although I roll that back into the payment on both respective homes. 1 of the rentals has 100k equity in it, the other has about 35k and my primary is a new purchase so only has 15-20k. My credit score is 740 and I have more liquid on hand than I probably should. I’m more into business than real estate so I like to be ready to hop into new deals when they present themselves. I’ve always wanted to flip a home but was often told I’d need to buy in cash, this is something I never wanted to do, although I do recognize it’s benefits. I was wondering if the plan I’m listing below has any major flaws or if I’m missing any key elements. I’m totally open to any and all insight/advice. Thank you in advance!

—— EXAMPLE PURCHASE ——

- Property cost 300k

- Down payment 20% = 60k

- Borrow 240k from bank

- Spend 20-40k in renovations

- Conclude renovations within 3 months tops

- Rent for 1 year to avoid capital gains tax

- List property for 500k

- Sell

- Pay bank back

- Roll profits into next property

- Repeat

*I understand renovation and selling prices will vary, this is only an example of my thinking.