How Much Money To Save Before Flipping?

[Christopher Lynch]

Hi All

I am a full time Realtor ( almost 8 years in) I have helped many clients find success but now it’s time to find my own. 

I would like to start flipping houses. The average wholesale deal I am seeing is about 200k purchase price for my location. 

Based on that how much liquid cash should I save before getting into my first deal? I am going to go the hard money route. 

[Chad Shultz]

That is an answer you can't really put an exact number on.  The amount of liquid cash you should have available is the amount needed to properly complete the project.  Each property will be different as to what it will cost to flip.  There is also a difference between a full renovation, where you plan to get top of the market pricing, and what some others will consider a "flip".  Personally, I like to set myself apart from "flippers".  Being in RE for 8+ years, you have likely seen many homes.  You have also likely seen many "flipped" homes.  You should be able to easily tell the difference between a good project and one just thrown together.  The term "flip", as it is used today, gives buyers a bad taste in their mouth from the start.  Most Buyers first thought, when they hear the term "flip", is of poorly renovated properties where everything is just covered up to look nice, but the quality is lacking, ("lipstick on a pig").  My personal approach is to avoid that connotation, by producing the best result possible.  These two approaches will cost different amounts of money to complete, even if on the same property.  If you stay in the game for any length of time, your reputation will follow you, whether you want it to or not.  Doing your flips the right way will always pay off more in the end and down the road.  Whatever you choose, don't start a project without the funds to finish it.  This will ultimately put you in a tough spot, be more expensive and make it difficult to finish a project, if you are having to stop work to find funds.