How to Build a House Flipping Team

At its core, flipping houses is the most profitable form of home improvement and a great introduction to a career in real estate. Whether you’re looking into flipping homes as a DIY side-project or as a career move, you’ll need a network you can rely on to help keep the fix-and-flip projects under budget and on schedule in order to make a profit.

Why Do You Need a House Flipping Team?

House flipping is the business of buying low-value property, repairing or remodeling the living spaces to raise the value, and then selling them as turnkey-ready homes. The after repair value, or the ARV, is where you see the profit return, which means that you must have the resources in place to raise the value. That requires working with other professionals, frequently and efficiently, to flip the house as quickly as possible.

The ideal home flipping team is a network of people who bring knowledge and expertise in areas that you can use. If this professional network is a team, then you are their coach. You all have the common goal of making the successful flip, because you all profit from different aspects of it.

Once the house is purchased, the new owners can live in the homes while the renovations are made, or the empty houses can be repaired and then quickly resold. In either instance, buying property is an expensive investment, and it becomes your financial responsibility. Having a team of knowledgeable people working with you can improve the value of the investment, and you’ll have the reassurance that the experts on your team will take care of your property.

There may be a different team for each neighborhood you invest in. Over time you may find some people you work with better than others, for different types of projects. There is no cap on the number of experts on your team. Their collective knowledge is your leverage when it comes to flipping homes. 

The Basic Home Flipping Team

However many professionals you pull into your network, there are a few different job types you’ll want to be certain you include. Even if you choose to do the projects yourself, these different professions will have specific skill sets and knowledge to tap into and learn from, if not invest in their services regularly.

CPA

A Certified Public Accountant can keep your business on track financially. Before you even begin your business, it’s worthwhile to talk to a CPA to help set up a sound financial business structure and plan. The CPA can ensure that your case has the necessary federal ID numbers and other tax information to get started and begin seeking financing. 

CPAs can help register your business and determine how it will be handled financially, as either a partnership, sole proprietorship, Limited Liability Company (an LLC), or a C or S corp. The different types of businesses offer different advantages depending on how many owners the company has and how much liability will be assumed per owner. These details are largely related to tax codes and help the company’s registry with the IRS.

When it comes to flipping houses, the CPA will work with you regularly on applicable tax laws relating to the properties. They will have to be aware of both federal and state laws in regard to home restoration and flipping homes, as well as any local taxes or fee requirements.

Bookkeeper

CPA offices often have bookkeepers on staff to help keep your company’s finances in order. Bookkeepers track expenses, such as any business overhead, paying contractors, and the general cost to flip a house with every project. The financial information they organize is turned into summary reports and used to keep the CPA and the business owner informed on how the company is performing, and ultimately used to file and maintain tax records, under the CPAs authorization.

Lawyer

A lawyer is key to setting up a business the right way. They offer the requisite legal services to establish a business plan, appropriate licensing, articles of organization, and register your business with the necessary state and federal agencies. This includes filing for tax ID and other financial issues, which may have them working with your CPA. 

While this documentation can be done online by yourself without the extra costs, it’s still best to consult with a professional. Hiring a lawyer can protect your personal assets from your business liability risks. It’s important to start your business off correctly, make sure all potential loopholes are tended to right up front, and lawyers have the experience to anticipate potential problems.

Real Estate Attorney

Once you have the business established, a lawyer obviously is there for any future problems that arise. That’s why it’s a good idea to find a lawyer who specializes in property use and contracts. Contracts, billing, zoning, and other land use issues can end up in legal limbo for months or years that would potentially tie up a property to either delay a purchase or prevent a sale. A good real estate attorney is able to handle any liability, pricing, permit, and title problems that may arise.

Lenders

There’s more to funding the cost to flip a house than just having the purchase money ready upfront. Flipping houses requires a significant, possibly long-term financial investment to purchase a property for home restoration. If you don’t have the cash in hand to spend, borrowing through a lending or financing arrangement is a good way to get started. 

Look for private business partners such as other property owners with available real estate, or joint venture partnerships with financial institutions. Stick with the lenders who can work within your project timelines, and make sure you are well informed of all rates, fees, and obligations before you agree to financial terms.

A good member of your team is a familiar loan officer with your preferred financing source. The loan officer will help process paperwork, accumulate records, and see your loan applications through to the approval. Build a reliable working relationship with your lending team so they can get you the best deals. 

Financing can reduce the risk to your personal assets, so you won’t lose your own home trying to get started flipping houses. With the right financing source, it’s possible to purchase and work with multiple fix-and-flip projects at once rather than one at a time. 

Real Estate Agent

When learning how to flip homes, it’s very helpful to make friends with real estate agents. Flipping houses requires interacting with real estate agents at different stages of every project, from buying the property to flipping it and selling it. These agents know the trends, from what features their clients are looking for, to the price range a home will sell for, depending on the neighborhood.

Agents are a good source of information for planning a timeline to flip a house after the repairs, in addition to offering leads on where to find good properties to be bought and flipped. Some real estate agents specialize in properties available through bank foreclosures and shortsales, which are excellent opportunities for fix-and-flip homes. The right agent will make buying and selling houses to flip a much more streamlined process.

General Contractors

The general contractor is the member of your team who runs the “rehab” or restoration of the home. They assess what work needs done, and work with you, or the architect or designer, to determine a timeline for the remodel, and then they make sure the work is done.

Professionals can deal with a variety of home construction problems, or prevent them, and should have the expertise to recognize problems that others may miss. It’s important to hire someone who can do the work effectively, quickly, and cost efficiently. 

The general contractor is also in charge of arranging for all of the work on a home restoration project, which could include hiring any of the following subcontractors:

• Carpenter
• Plumber
• Electrician
• Roofer
• Drywall installer
• Window installer
• Flooring installer
• Cabinetmaker
• Tile setter
• Painters
• Fencing
• Landscaper

If you choose to do the work yourself, you become the general contractor of your fix-and-flip. Whether as a DIY or as a team project, consider the abilities of your team and resources as you weigh renovation vs remodel on any home flipping project.

Home Flipping Experts to Look For

There are many professionals you’ll work with regularly as you build your career flipping houses. While the basic team above are people you’ll see quite often and will want to build a solid working relationship with, there are others who will be needed depending on the demands of the project. It’s a good idea to know a few of these experts as well.

Architects

Architects create blueprints and detailed renovation plans up to code to pass inspections and obtain necessary permits within your project budget and timeline.

Insurance Agent

Whether busy with contractors working with power tools or while standing empty, houses should be insured. The policies and requirements will change from area to area, and an insurance agent helps you navigate the best policies to protect your investment.

Inspectors & Permit Expeditors

Inspectors and permit expeditors help keep your home flipping projects up to code. They’re usually from a background in inspection and code enforcement and know what permits will be required, at what stages, to prevent mandatory corrections post-inspection. Some general contractors can offer this advantage, as well.

Retail Supplier

With multiple houses, there will be a lot of building materials to buy, and you’ll have to organize predictable delivery to meet the demands of your schedule. Retail suppliers (like Build.com) will often have customer care agents for professionals to buy in bulk or at discounted prices for your home restoration projects.

Staging Company

Staging a property means partially furnishing a home in order to make it more attractive to buyers. This can flip a house faster and at a higher asking price than homes without. Hiring a staging company gives you access to an interior design wizard with furniture and decor on hand to boost the home to showroom-ready status. 

Title & Escrow Company

A title company can provide a variety of services, from legal issues with titles or tenant rights, to short sales and estate or probate matters. These agencies research and protect the titles of properties, as well as handle the transfer paperwork. They also facilitate sales, including holding the earnest money.

Wholesalers & Private Owners

Wholesalers are investors who buy up distressed and reduced-rate properties for the express purpose of selling to buyers interested in flipping houses. Like private owners, they have the property available, and are good resources to start with when locating a home to flip.