House Flipping Business Plan Template [Updated 2023]
House Flipping Business Plan Template
If you want to start a house flipping business or expand your current house flipping business, you need a business plan.
The following House Flipping business plan template gives you the key elements to include in a winning real estate flipping business plan.
You can download our Business Plan Template (including a full, customizable financial model) to your computer here.
Below are links to each of the key sections of an example house flipping business plan. Once you create your plan, download it to PDF to show banks and investors.
House Flipping Business Plan Home I. Executive Summary II. Company Overview III. Industry Analysis IV. Customer Analysis V. Competitive Analysis VI. Marketing Plan VII. Operations Plan VIII. Management Team IX. Financial Plan
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How to Write a House Flipping Business Plan
Before you buy your first flip property it's important to create a business plan to map-out the future of your business, develop a course of action, and create quantifiable goals for your business.
Download Our House Flipping Business Plan Template
Download a Free Copy of Our Comprehensive 14-Page House Flipping Business Plan Template that you can use as a starting point for building your own house flipping business plan.
Do I Need A Formal Business Plan For My House Flipping Business?
<span class="lesson-quote--tag orange">REALITY CHECK</span> <p>Well No, You Don't Need A Formal Business Plan To Get Started Flipping Houses, But At The Very Least You Should Think About What Your Goals Are For Your Business And Set A Plan Of Action On How You Are Going To Achieve Those Goals.</p>
Okay, Then Why Create A Formal House Flipping Business Plan?
Reason # 1 to map out the future of your business.
A well-written business plan can be used as a road-map to plan out the near-term and long-term future of your business.
Reason # 2 To Create A Plan Of Action
Your business plan can establish a course of action for your new business, including what you need to do to get started, and your business strategies and processes for managing your on-going business.
Reason # 3 To Set Quantifiable Revenue & Profit Goals
Creating realistic and quantifiable revenue and profit goals is the most important step of creating a business financial plan. You will use your financial plan as a benchmark to track your actual revenue and profits to hold yourself accountable for achieving your desired financial growth.
Reason # 4 To Get Funding From Business Partners & Lenders
A business plan can help communicate your companies' strategies, objectives and company goals to secure funding from your Business Partners and Lenders.
What Should Be Included In My House Flipping Business Plan?
Here are the 5 components you should consider including in your House Flipping Business Plan:
- Organizational Structure, Team & Operations Plan
- Business Systems & Processes
- Business Goals & Strategies
- Keys to Success
The Executive Summary of your business plan is the elevator pitch for your house flipping business. The Executive Summary should be a brief overview of your business and summarize the key points of your business plan, and define your business goals.
Your Executive Summary is the first part of the business plan that your investors and lenders will read, so it needs to be concise, compelling and engaging so the readers will continue to read the remaining pages of your business plan.
Your Executive Summary should be tailored to the particular audience that you are pitching. If you are pitching to a Private Money Lender or a Hard Money Lender, briefly discuss your business's value proposition, experience, competitive advantages, business goals and pitch your investors on why they should invest or lend with your company.
Although the Executive Summary is the first section of your business plan, it's often easiest to write the Executive Summary last once you have thought-out and written all of the key points of your plan.
Do You Need An Executive Summary?
If you are pitching your business to a Private Money Investor, Hard Money Lender or potential business partner, an Executive Summary will provide a quick 'elevator pitch' to your investors so they can get a quick summary of your business, objectives and needs for funding.
Learn about the different Funding Options for House Flips
<span class="lesson-quote--tag orange">REALITY CHECK</span> <p>If You Are Writing A Business Plan As An Internal Document To Help Map-Out The Future Of Your Business, An Executive Summary Is Probably Unnecessary.</p>
Business entity & structure.
Before you buy your first flip property you need to decide how you want to organize your business. Are you going to be flipping houses as sole proprietor without creating a business entity? Or are you going to create a business entity, such as an LLC, or a Corporation to mange your business.
In the next Lesson, we will discuss the How to Create an Business Entity for House Flipping Business.
<div class="lesson-quote-block blue"> <div class="lesson-quote--container"> <div class="lesson-quote--eyebrow u-text-teal">Exercise</div> <div class="lesson-quote--col-1 u-text-white">Do You Have A Team Or Are You A Soloprenuer Taking On Everything Yourself?<p style="color:#ffffff;">Write A Short Resume About Yourself And Your Work Experience And Provide Information About Key Members Of Your Team.</div> </div> </div>
Talk About Yourself
As the founder of your company, discuss your relevant work/business experiences that make you a strong leader of your company and discuss your role in the on-going operations of the company.
Talk About Your Team
There are a lot of different skill sets and experiences needed to flip houses, so it's important to build a team of experts that can help you along the way. Your house flipping team doesn't necessarily have to be someone on your company's payroll. Your house flipping team can be anyone, internal or external, that is integral in the on-going operation and future success of your company.
Discuss the key players of your Project Team including your Acquisition Managers, Project Managers, Contractors, & Real Estate Agents.
Business Strategies & Processes
<div class="lesson-quote-block blue"> <div class="lesson-quote--container"> <div class="lesson-quote--eyebrow u-text-teal">Exercise</div> <div class="lesson-quote--col-1 u-text-white"> Where Is Your Market And What Is Your Typical Flip Project?<p style="color:#ffffff;">Identify The Target Markets, School Districts, And Neighborhoods Where You Will Build Your House Flipping Business.</div> </div> </div>
Understanding your market and buyers is essential to providing a home that meets your buyer's demands.
First, identify the markets and neighborhoods that provide strong catalysts for demand such as strong job markets, good school districts, low crime rates, & proximity to amenities.
In Chapter 2, we will discuss in depth How to Perform Market Research for Flipping Houses.
<div class="lesson-quote-block blue"> <div class="lesson-quote--container"> <div class="lesson-quote--eyebrow u-text-teal">Exercise</div> <div class="lesson-quote--col-1 u-text-white">What Type Of Houses Do Your Buyers Want? How Much? How Many Bedrooms, How Many Baths And How Much Square Feet? What Type Of Finishes?<p style="color:#ffffff;">Narrow Down Your Market Research And Identify Your Target Market And The Characteristics Of An Ideal Flip Candidate That You Will Focus On For Your Business.</div> </div> </div>
Targeting Your Ideal House Flip
Once you identify the market and neighborhoods to invest in, research the property types and finishes that best meets your buyers expectations.
Utilize online resources such as the MLS, Zillow.com, Redfin, etc. to research your market inventory, property values, and competition that is currently in the market.
It's also a good idea to walk-through as many open houses as possible so you can get exposure to the types of finishes and materials that your competition is utilizing in their flips.
If you need assistance, talk to your local realtor, and they will be able to help you identify the ideal markets, neighborhoods and homes that buyers are currently seeking.
In Chapter 2, we will discuss in depth How to Target Your Ideal House Flip Project.
<div class="lesson-quote-block blue"> <div class="lesson-quote--container"> <div class="lesson-quote--eyebrow u-text-teal">Exercise</div> <div class="lesson-quote--col-1 u-text-white">Where Will You Get Leads And Find Deals?<p>Create A Plan To Start Generating Leads And Finding Deals.</div> </div> </div>
Leads & Acquisition Strategies
In order for your business to grow and meet your project, revenue and profit goals, you will need to have a lead acquisition strategy to find leads and deals for your business.
Dedicate a section in your house flipping business plan to discussing your lead generation and acquisition strategies that your business utilizes to find leads, deals and projects for your business.
In Chapter 2, we will discuss different Lead Strategies for Finding House Flip Deals.
<div class="lesson-quote-block blue"> <div class="lesson-quote--container"> <div class="lesson-quote--eyebrow u-text-teal">Exercise</div> <div class="lesson-quote--col-1 u-text-white">How Will You Analyze Deals To Minimize Risk?<p style="color:#ffffff;">Establish The Parameters You Will Use To Evaluate Deals To Determine The Maximum Purchase Price You Should Offer For A Property.</div> </div> </div>
Deal Due Diligence
Once you find leads and deals for your business, you need to have a business process for analyzing deals to ensure your flip projects are profitable.
In your house flipping business plan, dedicate a section to discussing your due diligence process that your company undergoes to evaluate a potential flip property. Your due diligence process should involve a property inspection, repair estimate, comparable sales analysis & maximum purchase price analysis.
For more information, we have created an entire chapter on How to Analyze House Flip Deals.
<div class="lesson-quote-block blue"> <div class="lesson-quote--container"> <div class="lesson-quote--eyebrow u-text-teal">Exercise</div> <div class="lesson-quote--col-1 u-text-white">How Will You Manage Projects To Minimize Risk?<p style="color:#ffffff;">Once You Get A Deal Under Contract, You Need To Have Established Project Management Systems To Help You Track Your Project Progress And Expenses To Keep You Project On-Schedule And On-Budget.</div> </div> </div>
Once You Get A Deal Under Contract, You Need To Have Established Project Management Systems To Help You Track Your Project Progress And Expenses To Keep You Project On-Schedule And On-Budget.
Project Management Strategies
Once you get your flip projects under contract, you need to have business processes in place to help manage your projects to ensure that your projects are finished on-time and on-budget. You may want to consider utilizing a rehab project management software (like FlipperForce.com).
In your house flipping business plan, dedicate a section to discussing your Project Management processes to manage your Contractors, Project Schedule & Budgets.
In Chapter 5, we discuss the processes necessary for Managing your Rehab projects.
Business Goals & Forecasts
Creating realistic and quantifiable project, revenue and profit goals is the most important step of creating a business financial plan. You will use this financial plan as a benchmark to track your actual revenue and profits to hold yourself accountable for achieving your desired financial growth.
3 To 5 Year Financial Plan
Create a short-term financial plan for your business that forecasts the number of projects, revenues & profits for your first 3 to 5 years of operation.
The first step of establishing your company financial goals is to plan the number of projects you will flip in a calendar year. Create a realistic goal of the number of projects that you and your team can take on in the first year, and then forecast your project growth for years 2, 3, 4 & 5.
<div class="lesson-quote-block blue"> <div class="lesson-quote--container"> <div class="lesson-quote--eyebrow u-text-teal">Exercise</div> <div class="lesson-quote--col-1 u-text-white">How Much Revenue Do You Plan On Generating? <p style="color:#ffffff;">Use Your Forecasted # Of Projects To Calculate The Amount Of Revenue Your Business Will Generate In 1st, 2nd & 3rd Years.</div> </div> </div>
Once you have a realistic plan of the # of annual, projects you can forecast your revenue goals for each year.
Your Revenue refers to the amount of sales revenue generated from selling your properties. As a part of your market analysis, you need to determine the average resale value of your properties after you make the repairs. Once you determine your average resale price (After Repair Value) you will multiply the number of projects by the average sales price to calculate your Annual Revenue.
Annual Revenue = # of Projects per year * Average Sales Price.
Example: In our first year, we are planning on flipping 4 properties w/ an average After Repair Value of $250,000.
Annual Revenue = 4 * $250,000 Annual Revenue = $1,000,000
<div class="lesson-quote-block blue"> <div class="lesson-quote--container"> <div class="lesson-quote--eyebrow u-text-teal">Exercise</div> <div class="lesson-quote--col-1 u-text-white">How Much Profit Will You Generate From Your House Flips? <p style="color:#ffffff;">Use Your Revenue Projections to Calculate Your Profit Goals in Your 1st, 2nd, and 3rd Years.</div> </div> </div>
Once you forecast your annual revenue, you can forecast your Net Income (Profit). Generally, house flippers shoot for a profit % of 10% to 20% of the After Repair Value on a project. To forecast your Net Income for the year, multiply your profit % by your forecasted annual revenue.
Net Income = Annual Revenue * Profit %
Example: In our first year, we are forecasting $1,000,000 in revenue w/ a 15% profit margin on all sales.
Net Income = $1,0000,000 * 15% Net Income = $150,000
Learn How Much Profit You Should Expect to Make on an Average House Flip
Keys To Success And Meeting Your Goals
To meet your Company Goals & Objectives over the 3 to 5 year period, your Team will have to execute your business strategies & processes. Over the course of the first few years use your Business Plan as a gauge to track your business progress against business goals.
Project Team/Strategic Hires
As your company grows you will need to consider strategic hires that will fit with your company culture and share our company values.
Your company will need to build strategic relationships and partnerships with local contractors, realtors & professionals to continue to grow your network of connections and grow your brand in the community.
Your company will need to build systems or utilize house flipping software (like FlipperForce.com) that will help your team be more efficient which will ultimately support your ability to take on more projects to increase revenues and profitability.
our company will need to build strategic relationships with Private Money Lenders & Hard Money Lenders to get funding for your projects.
House Flipping Business Plan Template
House flipping business plan.
You’ve come to the right place to create your House Flipping business plan.
We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their House Flipping companies.
Below is a template to help you create each section of your House Flipping business plan.
SW Redevelopment is a new house flipping company that specializes in buying properties in Phoenix, Arizona and turning them into exquisite homes suitable for a better living experience. The company will operate in a professional setting, conveniently located near the center of the city. Our company partners with the best contractors and designers in the city to help renovate and design the best homes possible for Phoenix residents.
SW Redevelopment is run by Erin Briggs, an MBA graduate from Arizona State University with more than 20 years of experience working as a real estate broker. Throughout her career, she realized the hardest part of selling a house is getting it in perfect condition to put on the market. That’s why she decided to start a company that takes that pressure off residents so they can sell their homes with ease.
SW Redevelopment will be able to provide the following services:
- Personalize house designs (both interior and exterior)
- Property restoration or renovation
- Project cost evaluation
- Broker opinion of valuation
- Marketing property for lease/sale
SW Redevelopment will primarily offer single-family residential properties.
SW Redevelopment will primarily serve house buyers and sellers interested in properties within the Phoenix, Arizona area. We expect much of our customer demographic will include middle to upper-class families and first-time homebuyers.
SW Redevelopment’s most valuable asset is the expertise and experience of its founder, Erin Briggs. Erin has been a licensed real estate broker for over the past 20 years. She has spent much of her career working in different real estate agencies and has an in-depth knowledge of the Phoenix housing market. She knows that residents struggle to renovate their homes before selling and therefore created this company to take that process off their hands.
SW Redevelopment will employ an experienced assistant to help with various administrative duties around the office. The company will also hire or partner with the best contractors and designers to design the best-looking homes in the Phoenix area.
SW Redevelopment will be able to achieve success by offering the following competitive advantages:
- Design Team: The design teams are made up of creative individuals that are adept at renovation, restoration, building projects. They all highly value the opinions and preferences of their clients, making their designs personal and unique to each one.
- Management: Our management team has years of business and marketing experience that allows us to market and serve clients in a much more sophisticated manner than our competitors.
- Relationships: Having lived in the community for years, Erin Briggs knows all of the local leaders, newspapers, and other influencers. As such, it will be relatively easy for us to build branding and awareness of our company.
- Location: We are located in the heart of the city and are near prime locations where we’re exposed to individuals who have the ability to purchase properties.
SW Redevelopment is seeking a total funding of $1,070,000 of debt capital. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses, and working capital.
Specifically, these funds will be used as follows:
- Office space build-out: $50,000
- Office equipment, supplies, and materials: $20,000
- Initial property purchase and renovations: $600,000
- Six months of overhead expenses (payroll, rent, utilities): $250,000
- Marketing costs: $50,000
- Working capital: $100,000
The following graph below outlines the pro forma financial projections for SW Redevelopment.
Who is sw redevelopment, sw redevelopment history.
After 20 years of working in the real estate industry, Erin Briggs began researching what it would take to create a house-flipping company. This included a thorough analysis of the costs, market, demographics, and competition. Erin has compiled enough information to develop her business plan and approach investors.
Once her market analysis was complete, Erin Briggs began surveying the local office spaces available and located an ideal location for the business. Erin Briggs incorporated SW Redevelopment as a Limited Liability Corporation on October 1st, 2022.
Once the lease is finalized on the office space, renovations can be completed to make the office a welcoming environment to meet with clients.
Since incorporation, the company has achieved the following milestones:
- Acquired the perfect location for their headquarters
- Identified properties to start flipping
- Began recruiting key employees
- Utilized connections to find the best designers and contractors
SW Redevelopment Services
With the demand for houses increasing substantially over the past few years, there has also been a great demand for house-flipping services. House flipping helps sellers sell their homes with less work and helps buyers find the perfect home of their dreams.
The past few years have seen the largest increase in house flipping since 2006. Over 320,000 single-family homes and condos in the United States were flipped in 2021, up 26% from the previous year. This trend continued into 2022 and is expected to continue in 2023.
The factors contributing to this solid growth include rising home prices, increased sales, and greater construction combined with higher homebuyer demand. Furthermore, consumer spending will drive business expansion, and ensuing investor confidence in real estate will help raise commercial transaction volumes. Now is a great time to start a house-flipping business, as the market is sure to remain strong.
Demographic profile of target market.
The precise demographics for Phoenix, Arizona are:
We will primarily target the following customer segments:
- Home sellers
- Middle and upper-class families
Direct and indirect competitors.
SW Redevelopment will face competition from other companies with similar business profiles. A description of each competitor company is below.
Property Fortune Flippers
Founded in 1985, Property Fortune Flippers is an integrated network of companies concentrated on real estate opportunities. A leading acquirer of distressed residential real estate across the United States, Property Fortune Flippers has grown into a diversified, vertically integrated company, expanding its business footprint to include residential rehabilitation, non-performing loans, property management, private lending, brokerage, and escrow.
Established in 2004, House Flippers is a real estate investment, education, and coaching company. The company actively invests in real estate and has been involved in more than $1 billion of residential and commercial real estate investments since its inception. This success prompted the company to develop a systemized process that could be taught to prospective investors. The company manages between 25 and 40 ongoing redevelopment single-family and multi-family projects at all times, as well as acquiring apartment communities, retail shopping centers, and office buildings.
Established in 2007, Equity Investors is a real estate investment firm. It seeks to invest in distressed residential and commercial real estate asset investment, management, multifamily, workouts, and turnaround strategies in the United States and internationally. It focuses on raising, investing, and managing third-party capital, originating and securitizing commercial mortgage loans. Since its inception, Equity Investors has participated in the investment of billions of dollars of equity in real estate assets.
SW Redevelopment enjoys several advantages over its competitors. These advantages include:
Brand & value proposition.
The SW Redevelopment brand will focus on the Company’s unique value proposition:
- Client-focused designs, where the company’s design and floor plans are aligned with the customer’s specific needs
- Service built on long-term relationships and personal attention
- Big-firm expertise in a small-firm environment
The promotions strategy for SW Redevelopment is as follows:
The company will market its newly renovated homes with beautiful marketing pieces that are sent to local residents and real estate agents.
Open House Events
The company will host creative and appealing open house events to attract top real estate brokers and potential home buyers. Events will be entertaining and include food and drink.
SW Redevelopment will invest heavily in developing a professional website that displays all of the features and benefits of the company. It will also invest heavily in SEO so the brand’s website will appear at the top of search engine results.
SW Redevelopment will invest heavily in a social media advertising campaign. The marketing manager will create the company’s social media accounts and invest in ads on all social media platforms. It will use targeted marketing to appeal to the target demographics.
SW Redevelopment will resell its renovated homes at a competitive market price.
The following will be the operations plan for SW Redevelopment.
- Erin Briggs will be the President of the company. She will oversee all staff and manage client relations. She will also oversee all major aspects of the development and renovation projects.
- Erin is assisted by Eva Reed. Eva will serve as the administrative assistant, helping out with all paperwork, phone calls, and other general administrative tasks for the company.
- As the company grows and invests in new properties, Erin will hire several project managers to assist her.
- Erin is also in the process of hiring teams of architects, designers, contractors, and other professionals needed to successfully flip and renovate each property.
The following are a series of steps that lead to our vision of long-term success. SW Redevelopment expects to achieve the following milestones in the following six months:
3/202X Finalize lease agreement
4/202X Design and build out SW Redevelopment
5/202X Hire and train initial staff
6/202X Kickoff of promotional campaign
7/202X Launch SW Redevelopment
8/202X Reach break-even
Key revenue & costs.
SW Redevelopment’s revenues will come primarily from the earnings from property sales and revamping projects. More than half of the deals each quarter are expected to be design projects, and the rest will be from sales.
As with most services, labor expenses will be key cost drivers. Erin Briggs and future employees will earn a competitive base salary. Furthermore, the costs of transactions are projected to be roughly 45% of regular revenue and cover the advertising of listings, travel and supply costs for clients, and other direct costs for each deal.
Ongoing marketing expenditures are also notable cost drivers for SW Redevelopment, especially in the first few years as the company works to establish itself in the market.
Funding Requirements and Use of Funds
The following table reflects the key revenue and cost assumptions made in the financial model:
Income statement, balance sheet, cash flow statement, house flipping business plan faqs, what is a house flipping business plan.
A house flipping business plan is a plan to start and/or grow your house flipping business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.
You can easily complete your House Flipping business plan using our House Flipping Business Plan Template here .
What are the Main Types of House Flipping Businesses?
There are a number of different kinds of house flipping businesses , some examples include: Single Family Home, Multi-unit Complex, and Multi-investor Flipping.
How Do You Get Funding for Your House Flipping Business Plan?
House Flipping businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.
What are the Steps To Start a House Flipping Business?
Starting a house flipping business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.
1. Develop A House Flipping Business Plan - The first step in starting a business is to create a detailed house flipping business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.
2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your house flipping business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your house flipping business is in compliance with local laws.
3. Register Your House Flipping Business - Once you have chosen a legal structure, the next step is to register your house flipping business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.
4. Identify Financing Options - It’s likely that you’ll need some capital to start your house flipping business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.
5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.
6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.
7. Acquire Necessary House Flipping Equipment & Supplies - In order to start your house flipping business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.
8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your house flipping business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.
Learn more about how to start a successful house flipping business:
- How to Start a House Flipping Business
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House Flipping Business Plan Template
Written by Dave Lavinsky
Over the past 20+ years, we have helped over 10,000 entrepreneurs and business owners create business plans to start and grow their house flipping businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a house flipping business plan template step-by-step so you can create your plan today.
Download our Ultimate Business Plan Template here >
What Is a Business Plan?
A business plan provides a snapshot of your house flipping business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.
Why You Need a Business Plan
If you’re looking to start a house flipping business, or grow your existing house flipping business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your house flipping business in order to improve your chances of success. Your house flipping business plan is a living document that should be updated annually as your company grows and changes.
Sources of Funding for House Flipping Businesses
With regards to funding, the main sources of funding for a house flipping business are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.
Personal savings is the other most common form of funding for a house flipping business. Venture capitalists will usually not fund a house flipping business. They might consider funding a house flipping business with a national presence, but never an individual location. This is because most venture capitalists are looking for millions of dollars in return when they make an investment, and an individual location could never achieve such results. With that said, personal savings and bank loans are the most common funding paths for house flippers.
Finish Your Business Plan Today!
If you want to start a house flipping business or expand your current one, you need a business plan. Below are links to each section of your house flipping business plan template:
Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of house flipping business you are operating and the status. For example, are you a startup, do you have a house flipping business that you would like to grow, or are you operating a chain of house flipping businesses?
Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the house flipping industry. Discuss the type of house flipping business you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.
In your company analysis, you will detail the type of house flipping business you are operating.
For example, you might operate one of the following types of house flipping businesses:
- Single Family Home : this type of house flipping business focuses on one property that is usually bought at a low price, completely renovated and then sold for a profit.
- Multi-unit Complex: this type of business focuses on a multi-unit building where a house flipper rehabs every unit within the building and then either sells those units individually or sells the complex as a whole.
- Multi-investor Flipping: this type of house flipping is where houses are flipped between multiple investors before it enters the fix and flip stage.
In addition to explaining the type of house flipping business you will operate, the Company Analysis section of your business plan needs to provide background on the business.
Include answers to question such as:
- When and why did you start the business?
- What milestones have you achieved to date? Milestones could include the number of customers served, number of positive reviews, number of referrals, etc.
- Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
In your industry analysis, you need to provide an overview of the house flipping industry.
While this may seem unnecessary, it serves multiple purposes.
First, researching the house flipping industry educates you. It helps you understand the market in which you are operating.
Secondly, market research can improve your strategy, particularly if your research identifies market trends.
The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section of your house flipping business plan:
- How big is the house flipping industry (in dollars)?
- Is the market declining or increasing?
- Who are the key competitors in the market?
- Who are the key suppliers in the market?
- What trends are affecting the industry?
- What is the industry’s growth forecast over the next 5 – 10 years?
- What is the relevant market size? That is, how big is the potential market for your house flipping business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.
The customer analysis section of your real estate flipping business plan must detail the customers you serve and/or expect to serve.
The following are examples of customer segments: homeowners, prospective homeowners, contractors and real estate agents.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of house flipping business you operate. Clearly, prospective buyers would respond to different marketing promotions than contractors, for example.
Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most house flipping businesses primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.
Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.
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Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.
Direct competitors are other house flipping businesses.
Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes real estate agents, online home listing services and investors. You need to mention such competition as well.
With regards to direct competition, you want to describe the other house flipping businesses with which you compete. Most likely, your direct competitors will be house flippers located very close to your location.
For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:
- What types of customers do they serve?
- What types of housing units do they buy, rehab and sell?
- What is their pricing (premium, low, etc.)?
- What are they good at?
- What are their weaknesses?
With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
- Will you provide better design, construction and renovation services?
- Will you provide services that your competitors don’t offer?
- Will you provide better customer service?
- Will you offer better pricing?
Think about ways you will outperform your competition and document them in this section of your plan.
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a house flipping business plan, your marketing plan should include the following:
Product : In the product section, you should reiterate the type of house flipping company that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to house flipping, will you provide custom interior design services, financing or any other services?
Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.
Place : Place refers to the location of your house flipping company. Document your location and mention how the location will impact your success. For example, is your house flipping business located in a busy retail district, shopping plaza, mall, etc. Discuss how your location might be the ideal location for your customers.
Promotions : The final part of your house flipping marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:
- Advertising in local papers and magazines
- Reaching out to local websites
- Social media marketing
- Local radio advertising
While the earlier sections of your business plan for flipping houses explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.
Everyday short-term processes include all of the tasks involved in running your house flipping business, including scouting properties, attending house auctions, renovating homes and meeting with potential buyers.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to sell your 50th home, or when you hope to reach $X in revenue. It could also be when you expect to expand your house flipping business to a new city.
To demonstrate your house flipping business’ ability to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally you and/or your team members have direct experience in managing house flipping businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing house flips or successfully running small businesses.
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.
Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, will you purchase one new home per month or per quarter? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance Sheets : Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your house flipping business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.
In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a house flipping business:
- Location build-out including design fees, construction, etc.
- Cost of equipment and supplies
- Payroll or salaries paid to staff
- Business insurance
- Taxes and permits
- Legal expenses
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office location lease or blueprints of homes you are working on.
Putting together a business plan for your house flipping business is a worthwhile endeavor. If you follow the sample template above, by the time you are done, you will have an expert house flipping business plan; download it to PDF to show banks and investors. You will really understand the house flipping industry, your competition, and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful house flipping business.
House Flipping Business Plan FAQs
What is the easiest way to complete my house flipping business plan.
Growthink's Ultimate Business Plan Template allows you to quickly and easily complete your House Flipping Business Plan.
Where Can I Download a House Flipping Business Plan PDF?
You can download a house flipping business plan pdf here.
What is the Goal of a Business Plan's Executive Summary?
The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of house flipping business you are operating and the status; for example, are you a startup, do you have a house flipping business that you would like to grow, or are you operating a chain of house flipping businesses?
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Other Helpful Business Plan Articles & Templates
How to Write a Fix-and-Flip Business Plan + Free Template PDF
6 min. read
Updated November 13, 2023
Free Download: Sample Fix-and-Flip Business Plan Template
If you’re ready to dive into the world of transforming rundown properties into profit-generating gems, then crafting a rock-solid fix-and-flip business plan is your secret weapon.
This comprehensive guide will walk you through the essential steps to write a winning business plan to turn your real estate passion into a lucrative venture. Get ready to roll up your sleeves, grab a toolbox, and unlock the door to your fix-and-flip success story!
Need extra guidance? You can download our free fix-and-flip business plan template to help you get started.
- Why Write a Fix-and-Flip Business Plan?
Before you embark on your fix-and-flip adventure, it’s crucial to have a solid business plan in place. A well-crafted business plan not only serves as a roadmap for your real estate endeavors but also showcases your expertise and vision to potential lenders, investors, and partners. It demonstrates that you have a clear understanding of the market, a viable financial strategy, and a comprehensive plan to navigate the complexities of property acquisition, renovation, and resale.
- Conduct market research
Successful fix-and-flip investors know that market research is the foundation of their business. Understanding the local real estate market, identifying target neighborhoods, and analyzing property trends are vital to finding profitable opportunities.
- Consider the following key areas when conducting market research for your fix-and-flip business:
- Location Analysis: Research different neighborhoods and identify areas that have strong market demand, potential for growth, and attractive resale values. Look for neighborhoods with desirable amenities, good school districts, and convenient access to transportation and amenities.
- Property Analysis: Analyze property sales data, recent sales prices, and market trends in your target area. Pay attention to the types of properties that are in high demand and the average renovation costs to ensure you can maximize your potential profits.
- Competition Analysis: Identify other fix-and-flip investors and real estate developers operating in your target market. Evaluate their strategies, pricing, and property portfolios to gain insights into successful approaches and opportunities for differentiation.
- Network Building: Establish relationships with local real estate agents, contractors, and industry professionals who can provide valuable insights and opportunities. Attend networking events, join real estate investment associations, and leverage online platforms to expand your network.
- Financials and funding
Running a successful fix-and-flip business requires a thorough understanding of the financial aspects involved. Develop a comprehensive financial plan that includes accurate cost projections, realistic profit margins, and a strategy for securing funding.
What’s your biggest business challenge right now?
- Consider the following financial aspects when creating your fix-and-flip business plan:
- Project Budgeting: Calculate the total budget for acquiring properties, renovation costs, holding costs, and selling expenses. Consider factors such as property purchase price, closing costs, material and labor costs for renovations, insurance, property taxes, utilities, and marketing expenses.
- Profit Projections: Estimate the potential profit margins for each project by analyzing comparable sales in the target area and factoring in renovation costs. Keep in mind that unexpected expenses may arise, so build in a contingency budget to mitigate risks.
- Funding Options: Explore various funding sources to secure capital for your fix-and-flip projects. These may include personal savings, traditional bank loans, private lenders, crowdfunding platforms, or partnerships with other investors. Research each option to determine which aligns best with your financial needs and goals.
- Return on Investment (ROI): Calculate the expected ROI for each property based on projected profits and investment costs. A thorough analysis of your ROI will help you prioritize and select the most lucrative projects to maximize your returns.
- Execution Strategy: Rehab, Renovate, and Resell
With your market research and financial plan in place, it’s time to outline your execution strategy for your fix-and-flip business. This involves the process of acquiring distressed properties, rehabilitating them to increase their value, and reselling them for a handsome profit.
- Consider the following steps when developing your execution strategy:
- Property Acquisition: Identify distressed properties through various channels such as real estate agents, online listings, foreclosure auctions, or direct marketing. Analyze potential properties based on their condition, location, and potential for value appreciation. Conduct thorough due diligence, including property inspections and title searches, to ensure you’re making a sound investment.
- Renovation Planning: Develop a detailed renovation plan for each property, outlining the scope of work, estimated costs, and timelines. Consult with contractors, architects, and other professionals to ensure your renovation plans align with local building codes and market demands. Strive for a balance between cost-effective renovations and high-impact improvements that increase property value.
- Project Management: Efficient project management is crucial to stay on track and within budget. Create a timeline that outlines the start and completion dates for each renovation task. Regularly communicate with contractors, monitor progress, and address any issues that may arise. Effective project management ensures timely completion, minimizes delays, and maximizes your return on investment.
- Marketing and Sales: Develop a marketing strategy to attract potential buyers and sell your renovated properties quickly. Utilize both traditional and digital marketing channels such as online listings, social media platforms, real estate websites, and signage. Highlight the unique features and upgrades of each property to appeal to your target market. Consider professional staging and high-quality photography to showcase the property’s potential.
- Resale Timing: Timing is crucial in the fix-and-flip business. Monitor the local real estate market and consult with real estate professionals to determine the best time to sell your renovated property. Consider market trends, interest rates, and demand in your target area. Selling at the right time can significantly impact your profitability.
- Setting Goals and Tracking Progress
To stay focused and motivated on your fix-and-flip journey, it’s essential to set clear goals and track your progress. Setting both short-term and long-term goals allows you to measure your achievements and make adjustments as needed.
- Tips for starting a fix-and-flip business
- Specific Goals: Define specific goals for each project, such as the number of properties to acquire within a certain timeframe, target profit margins, or the total value of properties to renovate in a year. Ensure your goals are measurable and achievable.
- Performance Metrics: Identify key performance indicators (KPIs) to track your progress. This may include metrics such as acquisition costs, renovation costs, average days on market, or return on investment. Regularly review and analyze these metrics to evaluate the effectiveness of your strategies.
- Risk Management: Mitigate risks by conducting thorough market research, maintaining a contingency budget, and staying informed about market trends and regulatory changes. Be prepared for unexpected challenges and have backup plans in place to minimize potential setbacks.
- Continuous Learning: Stay informed about the latest industry trends, renovation techniques, and market dynamics. Attend workshops, seminars, and networking events to learn from experienced professionals and expand your knowledge base.
- Looking forward
With a solid plan in place, supported by thorough market research, financial projections, and a strategic execution strategy, you’re well-equipped to embark on your real estate adventure. Remember, the fix-and-flip business requires dedication, resilience, and adaptability. Stay diligent and committed to the process.
As you navigate the world of acquiring, renovating, and reselling properties, keep in mind the importance of building strong relationships with contractors, real estate professionals, and potential buyers. Continuously refine your strategies based on market trends and feedback from each project.
The fix-and-flip business can be both challenging and rewarding. With careful planning, meticulous execution, and a keen eye for potential, you have the opportunity to turn distressed properties into lucrative investments. Stay focused, adapt to market conditions, and always prioritize quality and value in your renovations.
- Download your free fix-and-flip business plan template
If you’re ready to start your own fix-and-flip business, you can download our free fix-and-flip business plan template from our library of over 550 sample business plans . Get started today, and discover why businesses that plan grow 30% faster than those that don’t.
See why 1.2 million entrepreneurs have written their business plans with LivePlan
Makenna Crocker is the Social Brand Manager at Palo Alto Software. Her work focuses on market and social trends, educational content creation, and providing entrepreneurs with small business tips and tools. With a master’s degree in Advertising and Brand Responsibility from the University of Oregon, she specializes in generating a strong and responsible brand presence through social media and sharable content.
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Business Plan Template
Free house flipping business plan template.
Are you confident about making smart financial decisions for your house flipping project? Create a clear path to success with our Free House Flipping Business Plan Template. Getting organized and creating a house flipping checklist can help you determine costs, project timelines, and help streamline the house flipping process. If you’re wondering how to get started flipping houses for a living, this template is a great starting point to create your business plan for flipping houses.
Complete the form on the right to subscribe to our email list. Once you subscribe, our free, editable business plan for flipping houses template will be sent directly to your inbox. This may be the most important part of your house flip — after all, you can’t build a house without a foundation, and starting a flipping business is no different!
Benefits of Writing a a Business Plan for Flipping Houses:
- Create a clear overview of the project to get your team on the same page
- Avoid disorganization
- Predict challenges
- Stay focused on your profits
- Prepare impressive professional documents for lenders, contractors, and inspectors
- Keep your project on track and stay ahead
- Improve your chances of getting approved for a loan
- Show partners that you’re serious
Request your Free House Flipping Business Plan Template today by filling in the form to the right and start flipping houses.
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House Flipping Business Plan Template
Whether you want to start your own house flipping business or expand an existing one, you need a business plan. the following house flipping business plan template lets you know what elements you need to include in a successful house flipping business plan., fill the form to download business plan templates.
To ensure your house flipping business success in this highly competitive market, you need a properly structured house flipping business plan. With over 12 years of experience, we have helped over 5,000 entrepreneurs create business plans to start and grow their house flipping businesses. Using the following house flipping business template, you can put together an effective business plan for house flipping.
Things to Know Before Writing a House Flipping Business Plan
Home flipping is the act of buying a home, making some improvements, and reselling it. Home flipping is also called wholesale real estate investing.
As the real estate data leader ATTOM report shows, home flipping has gained momentum in the past five years. The share of home flipping sales among all home sales was 5.7% in 2017 which rose to 9.6% in 2022, first quarter.
In 2021, a total of 323,465 homes were flipped.
The profitability of the home flipping industry has been on the decline. The industry earned an ROI of 51.4% in 2017 but the ROI for 2022 first quarter was only 25.8%. On the other hand, gross flipping profit has increased from $65,000 to $67,000. Falling median prices for homes is a contributing factor to this decrease in ROI.
The share of homes flipped with financing is decreasing and flipping with cash is increasing. The home flipping with financing has fallen from 43% to 37% of the industry and house flips with cash share has increased from 57% to 63%.
As of the first quarter of 2022, the most favorable states are Louisiana, Pennsylvania, and New Jersey. For the short term, these states are good for investing in home flipping.
Key Success Factors for the House Flipping Business
The key success factors for flipping homes are similar to the overall real estate investing and brokerage. Let’s see what these factors are and how you can prepare yourself for the venture.
High Investment Business : Real estate investing and home flipping is a high investment business. You will either have to have good savings or a credit line that you can use for investment. A good credit score will also be handy.
Effective Marketing and Promotion : You will need to market your property listings to maximize exposure and attract more clients. You can use realty listing websites such as Zillow, Redfin, etc.
Cost Control on Home Improvement : When you buy a house in a poor condition, you will invest to fix and improve it before you can sell it. You can spend more on home renovations that yield low returns and incur a loss. Carefully see what are the most rewarding home improvement investments that will increase home value and only make those investments.
Home Flipper Expertise : An experienced home flipper makes more money. Your knowledge of the industry directly affects your returns. Invest time and resources in learning the industry, how home services contractors work, how you can increase home value, etc., for better chances of success.
Proximity to Suitable Markets : Not all counties and states are good for home flipping. As the ATTOM report for Q1 2022 suggests, Louisiana, New Jersey, and Pennsylvania offer the most ROI for home flipping. Check the data before you invest.
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What is a House Flipping Business Plan?
A house flipping business plan is a road-map for starting and growing your house flipping business. Your business plan outlines your business concept, identifies your target customers, presents your marketing strategy, and details your financial projections.
Any bank or investor you approach will require a house flipping business plan, so putting one together will be critical to securing funding.
In short, writing a business plan can help you succeed if you’re thinking of starting a house flipping business or pitching to investors or venture capitalists.
Why You Need a House Flipping Business Plan
House flipping business plans can be used to gain interest from potential investors or to secure loans from banks. They are also helpful to you as the owner. A house flipping business plan allows you to thoroughly analyze every aspect of your potential business.
A solid, detailed plan gives you a clear path to follow, forces you to examine the viability of a house flipping business idea, and may help you better understand your company’s finances and competition.
House flipping business owners who have a business plan grow 35% faster than those who don’t, and 75% of fast-growing businesses have one.
A house flipping business plan is a living document that should be updated annually as your company grows and changes.
Free: Business Plan Examples
Do you need help creating a business plan? Check out these six free, proven business plan examples from different industries to help you write your own.
Sources of Funding for House Flipping
Home flipping is a high-investment business. Using your savings won’t be sufficient. Here are some ways to get funding for your home flipping business.
- Commercial Real Estate Loans against your commercial property
- SBA 7(a) loan , or an SBA 504 loan
- Equity Crowdfunding is feasible when you are going all-in for home flipping. You can form a company and offer stocks without being listed on the stock exchange. Investor business needs no accreditation.
- You can get a home equity line of credit (HELOC) if you own at least 20% of the equity in your home.
- Get investment property lines of credit and get a loan against your equity in investment property
- A business line of credit gets you a limit of credit that you can use and pay interest only on the used amount. you can secure such a line of credit with excellent credit and use it for investment.
- You can make a loan arrangement with the property seller and pay in installments. However, the interest rates are higher for such loans.
- Live-in Flip with Mortgage : When you have a stable income, you can buy a house on a mortgage, live in for a few years, make improvements, and sell it again.
How to Write a House Flipping Business Plan
To write a house flipping business plan, you don’t need to be an expert. Our step-by-step guide will show you how to write a house flipping business plan, or you can just download our proven sample business plans to get a better idea. Get house flipping business plan template and sample house flipping business plan pdf here.
House Flipping Business Plan PDF and Word
Download our house flipping business plan in PDF and Word here.
The executive summary is the most important part of the document since it outlines the whole business plan. Despite the fact that it appears first in the plan, write the executive summary last so you may condense key concepts from the other nine parts.
It’s a part that catches the investor’s eye and provides key information about your company’s overview and upcoming short- and long-term goals.
Tell them what kind of house flipping business you have and what stage you’re in; for example, are you a startup, do you have a house flipping business that you want to expand, or do you want to convert it into real estate investment firm?
Finally, an executive summary should provide investors with a preview of what they may expect from the rest of your document.
- Provide a high-level overview of the house flipping industry
- The name, location, and mission of your house flipping business
- A description of your house flipping business, including management, advisors, and a brief history
- Discuss the type of house flipping business you are operating, Give an overview of your target customers., and how your company differs from competitors in the industry
- Create a marketing plan that describes your company’s marketing strategies, sales, and partnership plans.
- And give an overview of your financial plan
Check out these executive summary examples to help you write a perfect one for your house flipping business plan.
Free: Executive Summary Examples
An executive summary is the most important part of your business plan, and it need not be challenging to write. This is why we have put together some awesome free Executive Summary examples for you.
Your company overview section in a business plan will be short and clear, similar to the executive summary.
Even if they just have a few minutes, your reader has to understand what your company does and who your customers are.
The following sections will be included in your business plan’s Company Analysis:
- Company summary:
Your company analysis will describe the type of house flipping business you are running and its future goals.
The type of flipping houses business you might be focused, for example, high-end neighborhood houses, apartments, condominiums, single family houses, multi-family houses, old houses, new and damaged houses, foreclosure houses, etc.
- Company history: When and why did you start your flipping houses business?
- What milestones have you achieved so far? Among the milestones might be the number of houses flipped, an certain profit figure, etc.
- Legal structure and ownership: Do you have S-Corp status? Is it an LLC ? A sole proprietorship ? Describe your legal structure.
- Mission statement: An overview of your house flipping business’s guiding principles. Learn how to write a perfect mission statement .
Provide a brief overview of the house flipping industry in your industry analysis. This may seem unnecessary, but it serves multiple purposes.
First, researching the house flipping industry will educate you. It gives you an understanding of the market in which you are operating. Secondly, market research can improve your strategy, especially if it identifies market trends.
Third, market analysis shows readers you are an expert within your field. Conducting research and presenting it in your plan is the most efficient way to accomplish this.
Industry analysis can be presented as a 8-step process when written as part of a company’s business plan.
- Give a quick overview of the house flipping industry. Define the house flipping business in terms of size (in dollars), historical background, service region, and products.
- Examine previous trends and growth patterns in the house flipping industry.
- Identify the market’s major competitors.
- Age, gender, and general lifestyle of the targeted market
- Determine the factors that have an impact on the house flipping industry. These might include government regulatory rules and other businesses’ competitive activities.
- Using research data, the industry forecast expected growth over the next five to ten years. Predictions should be made for both the long and short term.
- Describe how your house flipping business intends to position itself in the industry. Concentrate on how your house flipping business can benefit from opportunities highlighted in the industry.
The customer analysis section is an important part of any flipping houses business plan since it evaluates the consumer segments that your company serves. It identifies target customers, determines what those customers want, and then explains how your house flipping business will meet those requirements.
Customers can be categorized into the following segments:
- Other real estate investors
- People looking for a house
- Anyone in the market for a house
Customer analysis may be divided into two parts: Psycho-social profiles (why your house flipping suits a customer’s lifestyle) and Demographic profiles (descriptions of a customer’s demographic qualities).
With regards to demographics, include information about: the ages, genders, locations, and income levels of your customers. When targeting businesses, describe what kind of business, size, and location your target customers are.
The psychological profiles of your target clients reveal their wants and needs. The better you understand and identify these demands, the better your chances of attracting and retaining customers will be.
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It is necessary to do a competitor analysis. Because you may use their data to define your goals, marketing plans, tactics, new product lines, pricing, and more. Use competitor analysis to:
- Identify the strength and weakness of your house flipping business competitors.
- Search for opportunities to distinguish your house flipping business from competitors.
The first step is to determine who your direct and indirect competitors are.
The direct competitors consists of other house flipping businesses that offer essentially the same services to the same people as you do.
Indirect competitors are other real estate agents, brokerages, real estate agencies, online property websites like Zillow, Redfin, Realtor, etc. Such competition shows your understanding that not everyone who needs a house will buy it from you.
Once you’ve identified the competition, concentrate on the direct, head-to-head competitors, since they are the most threatening to your house flipping business— but keep an eye on the indirect competition as well, just in case.
Provide an overview of each direct competitor’s business and detail their strengths and weaknesses.
You will be able to position yourself competitively in the market if you perform proper competition research. Perform a SWOT Analysis to learn your competitors’ strengths, weaknesses, and competitive advantages in the following areas:
- Prices – Are they offering cheaper home or better value for the money, or more costly than you and other competitors, what value do buyers get for that price?
- Quality – Are they offering better home renovation and their homes look and function better, and the perceived worth in the eyes of the customers
- Customer service – How they respond to their consumers, whether they treat them poorly or well, and the degrees of satisfaction customers show
- Reputation — The sum of everything mentioned above: their credibility, how loved the brand is, and the loyalty of their customers
The final section of your competitive analysis should include a list of your areas of competitive advantage. for example: Are you going to offer houses for all budget ranges? Do you offer homes with added functions and decor that your competitors do not? Will you offer better pricing or will you offer greater customer support?
Consider how you will outperform your competitors and include them in this portion of your house flipping business plan
Free: SWOT Analysis Examples
Take advantage of our free SWOT analysis examples. Make your business future-proof by identifying your strengths, weaknesses, opportunities, and threats using this free SWOT Analysis Template.
Creating a marketing plan for a house flipping business involves identifying the target demographic and finding art that suit their preferences.
As part of your marketing plan for a house flipping business, you should include:
Pricing and Product Strategy
Your house flipping business must offer houses that have a vast target customer base so that the houses you flip could be sold quickly at a premium. Research what your competitors offer, how they improve the houses they buy, what types of home renovation adds the maximum value and you can outpace them with the premium location, better renovation, quality home material use for the house upgrade, and with a competitive price.
Placing and Promotions
Place refers to the city, neighborhood, or area you will do business in. Describe how your chosen area might attract home buyers. As an example, are you targeting a locality which is receiving an influx of the new settlers from the rural areas, other cities or states, or other neighborhoods of the same city. Are you going to target a wealthy city like New York or a growing city like Atlanta, Salt Lake, or Oklahoma city.
Promoting your house flipping business is the final part of your marketing plan. In this step, you document how you will drive customers to buy your services. A few marketing methods you could consider are:
- Listings in the property listings
- Participating in the industry events
- Property Expo
- Social media marketing
- Get referrals from current clients
- Optimize your Google My Business listings
- Reaching out to local bloggers and websites
- List your business on industry-specific sites
- Community Outreach
You should also think about your house flipping company’s Unique Selling Proposition (USP), which should explain why clients should choose you over other house flipping businesses. Ensure that your USP is reflected in your marketing.
Read Later: How to create a marketing plan in a business plan.
While the previous sections described your goals, your operational plan in a business plan discusses how you will achieve them.
An operations plan is helpful for investors, but it’s also helpful for you and employees because it pushes you to think about tactics and deadlines.
Your operations plan should be divided into two individual parts, as seen below.
Your daily short-term processes include all the tasks involved in running a house flipping business, including hiring and training employees and administering the business. etc.
Your long-term goals are the milestones you hope to reach. It may include the date when you hope to lease the facility or remodel the facility: or when you hope to reach $X in revenue.
The management team section in a business plan ‘ outlines your management team, staff, resources, and how your business ownership is structured.
This part may be easily organized by dividing it into the following points:
Internal Management Team
External Management Resources
This section outlines your house flipping business’s legal structure. If your company is a sole proprietorship , it may simply be one phrase. It might be longer if your company is a partnership or a corporation . You should make it a point to clarify who owns what part of the business.
This section should not only outline who is on your management team but also how each person’s skill set and experiences will contribute to the growth of your house flipping business. Ideally, you and/or your team members have direct expertise in the house flipping business. If this is the case, highlight your experience and skills.
Think of these external management resources as your internal management team’s backup. Consider forming an advisory board if your team is lacking expertise and experience with house flipping business.
An advisory board would consist of 3 to 7 people who would serve as mentors to your house flipping company. They would assist in answering queries and providing strategic direction.
If necessary, search for advisory board members with expertise running a house flipping business.
Describe all of your company’s external professional advisers, such as accountants, bankers, attorneys, IT experts, business consultants, and/or business coaches.
The final topic to consider in the management area of your house flipping business plan is your human resource needs.
As part of your financial plan, you should present a 5-year financial statement broken down monthly or quarterly for the first year, and then annually. Financial statements include your income statement, balance sheet, and cash flow statement.
A profit and loss statement is more commonly called an income statement. It shows your revenue and subtracts your expenses to determine whether you were profitable or not.
As you develop your income statement, you need to develop assumptions. Will you serve 30 patients per day or 200? Will sales grow by 2% or 10% per year? Your choice of assumptions will greatly impact your business’s financial forecasts. Conduct as much research as possible in order to ground your assumptions in reality.
Free: Income Statement Template
Create a financial statement for your business by downloading our free income statement templates.
While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities.
The balance sheet shows your house flipping business’s net value at a specific point in time. It categorizes all of your company’s financial data into three categories:
- Assets: Tangible goods with the monetary worth that the company owns.
- Liabilities: Debt owing to a company’s creditor.
- Equity: The net difference when the total liabilities are subtracted from the total assets.
The equation that expresses the relationship between these financial data elements is Assets = Liabilities + Equity.
Create a pro forma balance sheet for your house flipping business plan that highlights the information in the income statement and cash flow projections. A balance sheet is normally prepared once a year by a company.
Balance sheets indicate your assets and liabilities, and while they contain a lot of information, they are simplified to highlight the most important things you need to know.
For example, spending $200,000 to build out your house flipping business will not result in instant revenues. Rather, it is an asset that should help you earn money for many years to come.
Similarly, if a bank sends you a check for $200,000, you do not have to pay it back right now. Rather, that is a liability that you will repay over time.
Cash Flow Statement:
Your cash flow statement will help you determine how much money you need to start or grow your house flipping business. In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a house flipping business:
- Design fees, construction, and other costs associated with location development.
- Cost of equipment like display cases, computers, and software
- The cost of maintaining a sufficient art collection
- Staff payroll or salaries
- The total cost of insurance coverage (general liability, workers’ compensation, and property casualty)
- Start-up inventory costs
Pro Tips: Learn how to write a financial plan in a business plan to help you write a winning house flipping business plan.
Free: Balance Sheet Template
Create a financial statement for your business by downloading our free balance sheet templates.
List any additional material you cannot include elsewhere, such as resumes from key employees, licenses, equipment leases, permits, patents, receipts, bank statements, contracts, and personal and business credit histories.
Attach your full financial projections along with any supporting documents that make your plan more compelling in the appendix.
Bonus Tip: Learn how to write a business plan appendix for your house flipping business.
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Summary of the Flipping Houses Business Plan
A house flipping business plan is a worthwhile investment. As long as you follow the template above, you will become an expert in no time. By following the template, you will understand the house flipping business, your competition, and your customers. The plan will help you understand the steps necessary to launch and grow your house flipping business.
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House Flipping Business Plan [Template + Example in 2023]
Whenever you start or run a business, including a house flipping business, you should develop a business plan. Usually, this kind of plan is used for finding new partners or securing funding. Additionally, it will make it easier for investors to invest. Furthermore, it makes others want to work with you and gives you credibility.
Developing a solid business plan is the key to starting a house-flipping business. Your business plan's quality makes it stand out, so make it great. It might seem daunting, but don't worry. You can prepare a business plan with our House Flipping template and example.
The template and example in this article will ensure your business plan contains everything you need. Furthermore, we'll discuss common concerns and questions about a house-flipping business plan.
Without further ado, let's get into it!
How to Write a House-Flipping Business Plan?
Every House Flipping business plan must have the following sections:
- Executive Summary
- Business Overview
- Products and Services
- Market Analysis
- Marketing Strategy
- Financial Planning
- Operations Plan
- Management Team
Now, let's discuss each section in detail together with examples.
1. Executive Summary
An executive summary should be the first part of your House Flipping business plan. The purpose of this section is to explain what your business provides and what you will discuss in the remainder of the document. As a result, this section should be included after everything else.
A practical executive summary will help you make an excellent first impression. The mission statement and services offered by the company are summarized here. You should also explain why you are starting your own business and your experiences.
Kindle House Flippers is a real estate development company specializing in house flipping. We will have our main office in Long Island, New York. With this house-flipping company, we aim to provide cheap homes and properties to all socioeconomic groups in the country through collaboration with the American government.
With our plan of securing highly marketable properties at an accessible and fair price, we can compete effectively with the top players in the sector. To prioritize our customers, we will turn a healthy revenue and grow into one of the world's largest house-flipping companies.
2. Business Overview
An overview of your house-flipping business can be found in the Business Overview section of a business plan. This section should include your company's structure, values, mission, and products or services.
With this information, you can demonstrate how competitive your business is and will be in the future. Several different names can refer to a business overview. The terms used to describe them are Company Descriptions, Company Summaries, and Company Profiles.
Kindle House Flippers is a real estate development company specializing in house flipping. This house-flipping business aims to provide cheap homes and properties to all socioeconomic classes in the US. The head office will be in a typical Long Island, NY, office building.
Even though our head office will be in New York City, we will have branch offices nationwide. We aim to open offices in North Carolina, Wisconsin, Texas, Arizona, and Seattle within two years of opening.
We will form a self-managed and self-administered real estate investment trust called Kindle House Flippers. We plan to rank among the biggest house-flipping companies in the country by establishing a strong presence in key cities.
3. Products and Services
The Product and Service Section is where you'll list all the products and services you offer (or both). As part of your presentation, you will also discuss how these products or services can be manufactured, sold, or delivered. Therefore, you'll want to assess the suppliers of your product, the costs of the product, and the market position of your product.
Kindle House Flippers plan to operate within the parameters of the American real estate market as a typical and successful house-flipping enterprise. The purpose of starting a house flipping company is to take advantage of the market, and we will take any measures allowed by US law to do so. The following is a list of our business offerings:
- Flipping houses / exchanging properties
- Guiding buyers through the purchase process
- Managing of properties
- Auctioning Properties
- Preparing Leases and Contracts
- Placing properties on the public sale list
- Preparing and providing all necessary forms and disclosures to the seller
- Organizing an open house to showcase the property
- Prescreening buyers and ensuring they are financially qualified
- Offering fully furnished properties for sale
- Land selling for development
- Advising and consulting related to real estate
4. Market Analysis
A House Flipping Business Plan includes a section called Market Analysis, which explains your target market for the business. If you want to know who your competitors are and who your potential customers are, then use this section of your business plan.
The following information should be included in this section:
- Competitive Analysis: Determine the potential competitors in your market
- Customer Analysis: Discover and measure the audience you want to reach
- Industry Analysis: Assess the general environment of the industry
Reaching people from all backgrounds is critical to us. Through our business approach, we can serve rich people and people just looking for a roof over their heads.
Our target market is the whole country, so we want independent agents (brokers) to represent us there. The leadership and board of Kindle Home Flippers are experienced in the US real estate market.
They are investors and experts in their fields. All of those things will give us a competitive edge.
5. Marketing Strategy
Your marketing strategy is the section of your business plan that tells you how you plan to reach your target audience. Companies use marketing strategies to convey their customers' key messages and value propositions. If you want to know how to reach your target market, what motivates them, and how you can make them want to buy your products, then you can state those in this section.
Our sales and marketing staff will be chosen based on their industry expertise, and they'll get frequent training to ensure they're ready for their goals.
It's for all of our independent brokers, who are more than just full-timers dispersed around the country.
Since one of our goals is to rank among the country's top 15 home flipping companies, we have methods to help us take advantage of the market.
Marketing and sales strategies for Kindle House Flippers include:
- Introduce our company to stakeholders in the real estate industry, property owners, and potential clients throughout the country with introductory letters accompanied by our brochures.
- Bidding on homes/properties that are posted for sale as soon as possible
- Publicize our business in real estate and property magazines and websites.
- Make our business available in local directories like the yellow pages.
- Make attendance at real estate trade shows, seminars, business fairs, etc.
- Develop different packages for different client categories to sell our homes/properties successfully
- Promote our business through our official website and social media platforms on the internet.
- Display a visible "For Sale" sign whenever we list a property for sale.
- Promote our properties through word of mouth, especially when they are for sale.
6. Financial Planning
Financial planning is the section of your business plan that tells you your business's goals and how you will achieve them. The purpose of a financial plan is to assist organizations and individuals in becoming financially prosperous at the end of the day.
Starting a house-flipping business takes a lot of money. As a result, entrepreneurs need to pool their money or find investors.
Putting up an office building for this kind of company may require little capital, but managing it usually does.
Buying homes or other properties, remodeling them, and then putting them on sale would require a lot of cash.
7. Operations Plan
The mission of your Operations Plan is to outline the plan for implementing the actionable steps that your team will take to reach your strategic goals to execute your operations plan. This section lists the responsibilities each department employee has daily, weekly, and monthly.
A company's devoted customers, workforce, investments, and organizational structure determine its success. If all these components are missing, a company will close quickly.
Kindle House Flippers want to build a company that can function without outside funding once it's up and running.
For now, we're willing to endure a smaller profit margin since we know that selling our houses for a little less than what's available on the market is one way to win clients' approval.
8. Management Team
Your business plan should include a section for your organization's Management Team, giving a detailed overview of the whole staff and everyone involved in the operation of your organization. Your House Flipping business's success depends significantly on your management team's effectiveness. Moreover, if you wish to demonstrate your company's growth potential, you will need to highlight the skills and experience of the key players in your organization.
Your team members and you must have direct experience with the industry you plan to target. Therefore, it is essential to emphasize to the interviewer the candidate's expertise and experience to gain their attention. Including any experience that will benefit your business is essential in this section.
Mrs. Karissa Strickland will own most of Kindle House Flippers. Before starting her own company, Karissa Strickland worked for renowned US real estate firms. However, the company will include other investors with the same investing philosophy when it comes to pooling money for real estate purchases and renovations.
Below is the management team of Kindle House Flippers ;
- Karissa Strickland - Chief Executive Officer
- Chaz Barker - Project Manager
- Landyn Santos - Company's Lawyer / Secretary
- Alyson Blair - Admin and HR Manager
- Mckayla Harrell - Head of Construction
- Yosef Sparks - Head of Assets Management
- Rylee Avila - Head of Acquisition and Disposition
- Kathleen Curtis - Business Developer / Sales and Marketing
- Trent Giles - Accountant
- Ernesto Buckley - Front Desk Officer
House Flipping Business Plan PDF
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House Flipping Business Plan FAQs
Below are some of the frequently asked questions you may have about House Flipping Business Plans:
What Is a House Flipping Business Plan?
Business plans come in various formats, and the House Flipping Business Plan is no exception to that rule. Business plans are essential documents that can help you attract investors, obtain funding, cooperate with other businesses, and provide detailed information about your business.
As you can see, the House Flipping business plan provides detailed information about the company, its operations, and its structure. In addition, this report contains the details you need to know about the operations' finances, marketing, and management throughout the entire report.
As much as possible, businesses should consider various factors before launching their businesses, such as the cost of starting up, market research, mission statements, and succession planning, among others. These things are stated clearly in a good business plan.
Why Is a House Flipping Business Plan Important?
When starting up a house-flipping business, it is imperative to have a business plan in place. This document outlines the goals of the company as well as the structure of the company in the form of a business plan. Furthermore, you can follow or change the project flow as needed since you will have a basic outline.
If you hire and train employees, seek investors, or adjust your pricing strategy, it would be helpful if you had a House Flipping business plan. As a result, you should make one regardless of whether your business has already been launched or if you are still in the process of launching it.
Is Owning a House Flipping Profitable?
Due to the constant demand for house flipping services, a business can always be profitable. Therefore, consider it if you plan to launch your own business shortly.
In any case, whether you provide your customer service or hire an outside service provider, you must provide a superior service level. Your house-flipping business's profitability will be significantly affected by how it is managed. As such, you should prioritize customer service above small things.
You must develop a business plan before you open or operate a house-flipping business. With the aid of a plan, you will be able to identify your strengths, your competitors, your goals, as well as your workflow. Additionally, if you are seeking funding, a solid business plan can help you secure grants or investors if you need some funding.
With the help of this template, you can create a House Flipping Business Plan in which all the necessary information and elements will be included. Then, following our examples, you can develop your business plan based on the ones we gave you.
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11 Components Of A Successful House Flipping Business Plan
Why Start Flipping Houses?
What is a house flipping business plan, why you need a business plan for flipping houses, 11 important steps in your fix-and-flip business plan, assemble a team & execute, 5 house flipping mistakes to avoid.
There is absolutely no reason for a real estate investor to treat a flipping career like anything less than a legitimate business in today’s competitive marketplace. Whether flipping houses as a full-time job or supplementing a nine-to-five, every investor could benefit immensely from implementing sound business practices into their existing strategy. More specifically, however, there’s no reason to think a well-devised house flipping business plan can’t maximize even a new investor’s potential. If for nothing else, treating flips like a business will tip the scales in an investor’s favor while simultaneously eliminating inefficiency and inconsistency–two of the greatest threats to today’s entrepreneurs.
When asked why they start flipping houses, most investors will instantly lean into the fact that they get to work for themselves, that, and the money. In fact, it’s not a hard argument to make. Becoming a real estate entrepreneur can simultaneously be lucrative and fun. Few career paths award hard-working individuals with more freedom and the ability to generate wealth on the same level as a career in real estate.
Even when the pandemic all but brought the U.S. economy to a standstill, a proper house flipping business plan proved lucrative. As recently as last year, the average home flip “generated a gross profit of $66,300 nationwide (the difference between the median sales price and the median amount originally paid by investors). That was up 6.6 percent from $62,188 in 2019 to the highest point since at least 2005,” according to Attom Data Solutions’ year-end 2020 U.S. Home Flipping Report .
However, it is worth noting that the answer to the question will resonate on multiple levels for today’s best investors. You see, on the surface, it’s easy to understand why someone would want to start flipping houses: it’s a good way to work for yourself and make money. However, some see flipping houses as a bridge to get closer to what they really want. With the ability to realize financial freedom and work at their own pace, investors use real estate as a vehicle to bring them true happiness. Whether spending more uninterrupted time with family and friends or traveling the world, real estate can serve as the means to an end investors envision.
A house flipping business plan is nothing short of the most important aspect of a real estate investor’s career. To that end, I remain convinced few things–if any–come with a better return on investment (ROI) than a well-crafted business plan for house flipping. I could easily argue a great business plan is invaluable, which begs the question: What is a house flipping business plan? Better yet, why does anyone looking to flip properties need to implement one?
To be clear, a business plan for flipping houses is exactly what it sounds like: a plan for flipping houses. However, it is worth noting that a truly great house flipping business plan isn’t meant for flipping a single property but rather multiple properties. You see, a truly great flipping strategy isn’t meant to be used on a single property; it’s meant to guide investors through the house flipping process over the course of their entire careers. Therefore, any investor intent on running a successful rehab company needs to have a real estate flipping business plan of their own.
Today’s most prolific house flipping business plans act as a blueprint for success; better yet, they award savvy investors the chance to make success habitual.
It is not enough to simply start flipping houses on a whim; doing so exercises a reckless abandonment nobody will appreciate. Instead, investors need to devise a plan of attack, as to increase their odds of realizing success and giving themselves a blueprint to follow in times of need. It is worth noting, however, that a house flipping business plan does more than simply tell investors where to go. A truly great flipping houses business plan will also:
Help investors maintain an organizational level that is conducive to a successful business.
Show others how serious investors are, perhaps awarding them with a more trusted network.
Clarify whether or not a respective revenue model makes sense.
Share an investor’s vision with others easier than just about anything else.
Help lenders decide if they want to work with a specific borrower.
Help investors turn their thoughts into more actionable processes.
Bring to light an individual’s strengths and weaknesses.
Force some investors to address their own risk tolerance.
No two businesses are exactly alike, and it’s unfair to expect even similar companies to share the exact same business plan. Perhaps even more importantly, there isn’t a single, universal business plan for flipping houses that will work for every investor in a given market. What works for one investor may or may not work for another, and vice versa. Case in point: there are several ways to draft a promising business plan. That said, no house flipping business plan template is complete without the following sections:
Executive Summary (Mission Statement)
Team dynamic, swot analysis, opportunity, market analysis, financing and projections, growth strategy, lead generation and marketing, goals and objectives, competition, exit strategies.
Aptly named, the executive summary section of a house flipping business plan should sum up an investor’s intentions in a clear, concise mission statement. Perhaps even more specifically, the executive summary will serve as the foundation for an entire business; it’s the first impression, and it’s what customers will use to determine whether or not they want to work with a respective company. Every executive summary should, therefore, clearly define the company’s purpose and long-term goals.
No rehab strategy is complete without clearly identifying the team’s dynamic . Identify the most important positions that will be held and who will hold them. There is no need to acknowledge every person in the rank and file, but it’s important to include the most important positions. In addition to each person’s title and name included in the team dynamic section, be sure to include a description of the title and why it’s needed. This section aims to identify each person’s role moving forward and prevent any disputes over whose responsibility a specific task will be. More importantly, the team dynamic section will see that everyone has a clear idea of what they need to do.
A popular acronym is used to acknowledge a company’s strengths, weaknesses, opportunities, and threats. A SWOT analysis will help up-and-coming real estate investors identify the very components working for and against their current business plan. If for nothing else, success favors those that are most prepared. Few things will prepare a real estate investor for what’s to come better than identifying their own strengths and weaknesses. Perhaps even more importantly, an in-depth, unbiased SWOT analysis will help investors carve out their own niche moving forward.
It is in the best interest of today’s investors to identify the problems that plague their industry and the opportunities that are inevitably created as a result. It’s a sad reality, but a truth, nonetheless: distressed homeowners are in a difficult situation. However, their problems create an opportunity for investors to lend a helping hand. That said, investors need to identify their own opportunities and how they can take advantage of them. This part of the rehab strategy should identify the target audience’s needs and offer a solution.
The market analysis section of a flipping houses business plan should identify the main indicators of the area investors intend to work in. As its name suggests, a market analysis should offer an in-depth look at what’s taking place in the same neighborhoods investors intend to work in. Pay special considerations to the past, present, and future. Among other things, be sure to reference changes in the market share, nearby competitors, historical shifts in the market, costs, pricing, and anything else deemed important to an investor’s success. The more comprehensive, the better a market analysis will serve an investor.
Not surprisingly, the best strategies will detail a company’s financial outlook. Financial literacy about one’s own company can’t be underestimated, and one should prioritize almost everything else involved in a house flipping business plan template. Be sure to explain the model you intend to use and any pricing assumptions gleaned from the market analysis. Additionally, investors will also want to include where exactly they intend to get their funding from and how they will secure money for future deals. To be safe, consider forecasting for at least three years; that way, investors are less likely to receive rude or unwelcome awakenings. The financing section should also touch on how the investors intend to finance future deals. Include which sources will be used, and their respective fees and timelines. The more methods of financing a deal investors have at their disposal, the better. This section should include, but isn’t limited to:
Private Money Lenders
Hard Money Lenders
Owner Financing Strategies
Creating a business plan for house flipping will require investors to think proactively. More importantly, house flipping business plans–even those accommodating new investors–should be written with the intentions of future growth. Scaling a business can prove difficult for those companies that aren’t ready for it. Therefore, it is best to include a section in your initial rehab strategy that outlines any growth strategies that may be relevant. The best time to entertain a growth trajectory is from the onset of one’s career, not in the heat of the moment. Those prepared for growth from the beginning will find the transition to be a lot easier.
Every great house flipping business plan will include a section on how to generate leads through a proper marketing strategy. If for nothing else, this section will serve as the foundation for a great deal of the company to function off of. It is with a great marketing strategy that investors will be able to operate and maintain a funnel of hot leads. It is worth noting, however, that a truly great marketing system is the sum of its parts. There isn’t a single marketing strategy investors should be using, but rather several. For a better idea of what today’s investors are using, here’s a list of what has worked for us:
Direct Mail Marketing
Curated Lists Purchased Online
Real Estate Investment Clubs
No real estate investor can hope to realize success if they can’t clearly define what success for their own company would look like. In other words, it’s impossible to succeed if there are no clear goals and objectives to aim for. Likewise, you can’t possibly know if you realized success if you never sought to define what success actually means. Success is, after all, a relative term. What one investor may deem as a successful business, another could completely disagree with. Therefore, today’s new investors need to develop their own definition of success; that way, they can have something to strive for and even reference when times get tough.
For as important as it is to know your own business, it’s equally important to keep tabs on the competition’s business. There is a great deal of information that can be gleaned from the way your competition runs its business. Therefore, I recommend dedicating an entire section of your house flipping business plan to the people you intend to compete against. What are they currently doing that is working? What hasn’t worked out well for them? Do they currently have a competitive advantage? In understanding the competition, investors will have a better idea of how to proceed and what not to do. Be sure to learn from their successful efforts, but don’t ignore their shortcomings; they are just as valuable.
No plan is even remotely close to complete without a section that outlines potential exit strategies. Therefore, it is at this point in the planning process that investors need to weigh their available options. First, evaluate the property based on its merits and determine how it may meet your specific investing goals. If, for nothing else, there’s an ideal exit strategy for each property, but it must line up with your own goals. In other words, you need to know whether you will flip, rehab, wholesale, or rent the asset before you even buy it. Not only that, but you’ll need a backup plan in place in the event things don’t go according to plan.
It is entirely possible to pull off the perfect house flipping business plan by yourself. After all, one of the best reasons for becoming an investor is to become your own boss. That said, this industry can get very involved very fast. In addition, many skills are required to complete a single deal, all of which can be performed by a different professional. As a result, it may be in every investor’s best interest to assemble a well-qualified team. With a competent team at your side, you’ll be free to do more important activities. Not only that, but if you hire the right team, you can remain confident the job is getting done well.
A good real estate team is invaluable and can increase productivity exponentially. To see to it your team can compete on the highest level, you may want to consider enlisting the help of the following individuals:
Real Estate Agent: A truly great real estate agent is worth their weight in gold. Their knowledge of a given area and their contacts — alone — can save investors an incredible amount of time and money. As a result, a good real estate agent should be one of the first additions to your team.
Attorney: As I already alluded to, the real estate industry can get complicated really fast. A good real estate attorney can make sure you have every corner covered. Their help will mitigate risk around every corner.
Contractor: Good contractors may be found in any city, but the key isn’t to hire just any contractor; you need to hire the right one. A trustworthy contractor is invaluable to today’s investors. Their skills will show in the final product and keep investors on schedule.
CPA: Not unlike the industry itself, the numbers behind everything can get confusing. Therefore, it is important to hire someone familiar with real estate deals and their respective “numbers.” That way, there is much less of a risk of running the numbers incorrectly.
Inspector/Appraiser: Aligning your services with an appraiser or inspector can give investors an advantage. Not only will they serve as a valuable contact when it comes to getting a home inspected, but they can also expedite the process. Remember, time isn’t just money to real estate investors; it’s everything.
Successfully flipping homes requires investors to hone specific skills to increase their odds of making a profit. However, many investors don’t realize that it’s just as important to avoid mistakes as it is to be successful. Sometimes knowing what not to do is just as valuable as knowing what to do. With that in mind, here are some of the most serious house flipping mistakes to avoid:
Inadequate Funds: Any failure to calculate the amount of necessary funds could be disastrous. Running out of capital in the middle of a project can potentially lead to deal-ruining delays and perhaps the deal from being completed altogether. Consequently, those without adequate funds may find the urge to cut corners and produce an inadequate product, which can ultimately cut into profit margins. Instead of beginning a deal with inadequate funds, it’s better to give yourself extra cash to serve as a safety net.
Poor Time Management: Time isn’t simply money; it’s everything to an investor. Therefore, today’s investors really need to learn time management. The faster they can get in and out of a deal, the better. Holding costs will be down, and they’ll be able to move onto another deal even sooner if they can efficiently manage their time. Failure to do so can cost investors a lot of money and perhaps even ruin a deal. Instead of heading into a deal without a plan, investors need to have a schedule. Not only that, but they need to do everything they can to stick to it to avoid unnecessary setbacks.
Inexperience: As perhaps the biggest mistake of them all, far too many investors tend to get in over their heads. A lack of experience, for example, can lead o poor decision-making and folding under pressure. Therefore, investors should work within their comfort zone. Instead of attempting an exit strategy you aren’t familiar with, stick with what you know. When the time comes to branch out, educate yourself before moving forward.
Lack Of Education: A lack of education can be disastrous at any stage of an investment. Nothing is more sure to ruin a deal than ignorance. Therefore, investors must know everything about a deal before going into it. Proactively learn about every aspect of a deal. Read, listen to podcasts, take classes and talk to anyone you may learn from. Education is invaluable to an investor and can alter the course of their career in great ways.
Impatience: Patience is a virtue in the investing world. While time is money, it’s also important to maintain a level head. Sometimes patience can prevent investors from making a huge mistake. If for nothing else, acting irrationally can be devastating.
Today’s greatest real estate investors know it, and it’s about time everyone else did, too: no real estate investing company is complete without a thoroughly crafted house flipping business plan . As the blueprint for running a successful company, business plans are instrumental in developing a new investor’s name and even furthering seasoned entrepreneurs’ success. All things considered, the majority of today’s most successful investors can attribute their current position to a sound business plan.
There’s no reason to think a well-devised business plan for flipping houses can’t maximize even a new investor’s potential.
With a flipping houses business plan in place, investors should have a blueprint to follow before they even get started.
Use a house flipping business plan template if you aren’t sure how to draft one yourself.
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