Flipping houses can be an exciting and profitable venture—when done right. However, not every home is a good candidate for a successful flip. Choosing the wrong property can lead to costly surprises, tight profit margins, and a lot of frustration. Before you jump into your next project, here are some critical things to watch out for when selecting a house to flip.
1. Location, Location, Location
No matter how beautiful the remodel, a house in a bad location will always be a tough sell. Focus on properties in desirable areas with strong schools, low crime rates, and growing job markets. Look for neighborhoods where homes are selling quickly and at a price point that leaves room for your renovation costs and profit. Buying the worst house on the best street is still one of the smartest strategies in real estate.
2. Structural Issues
Cosmetic updates are expected during a flip—paint, flooring, kitchen and bath upgrades—but structural problems can quickly drain your budget. Watch out for signs of foundation issues, roof problems, major plumbing or electrical repairs, and water damage. Always get a professional inspection if you’re unsure. If a home has serious structural problems, you’re often better off walking away unless you have the experience and capital to handle major renovations.
3. Outdated Floor Plans
Older homes often have floor plans that don’t match today’s buyer preferences, like small, closed-off kitchens or awkward room layouts. While knocking down a wall or two is manageable, major reconfigurations that require rerouting plumbing, electrical, or HVAC can dramatically increase costs. Look for homes where you can make impactful changes without a full-scale reconstruction.
4. Permits and Legal Hurdles
Before buying a flip property, verify that any previous work was properly permitted and that no legal issues exist with the home. Unpermitted work can delay your flip, cost you fines, or force you into expensive corrections to meet code. Additionally, check local zoning regulations if you plan to add features like additional living space, garages, or accessory units.
5. Accurate Budgeting
One of the biggest pitfalls new flippers fall into is underestimating the cost of renovations. Always budget for the unexpected—hidden damage, permit fees, price increases in materials, or longer-than-expected project timelines. Create a detailed budget, then add a cushion of 15–20% for contingencies. If the numbers don’t make sense from the start, don’t force the deal.
6. Market Conditions
Real estate markets can shift quickly. A property that looks like a good flip today might be harder to sell in six months if interest rates rise or the local market slows. Always research the current market trends in the area and plan for different exit strategies. Some flippers hold properties as rentals if selling immediately isn’t profitable, so have a backup plan in case your timeline stretches.
7. Emotional Attachment
When flipping a house, it’s important to stay focused on the business side of things. It’s easy to get attached to a charming old home or want to “over-improve” a property based on personal taste. Always design for your target buyer, not yourself, and avoid upgrades that won’t add value. Every decision should be based on return on investment (ROI), not emotion.
Final Thoughts
Flipping houses can be rewarding, but success starts with choosing the right property. By carefully evaluating the location, structural condition, renovation costs, and market potential, you’ll avoid common pitfalls and maximize your chances of a profitable flip.
If you’re ready to start your next real estate investment journey and want expert advice on finding the right property, contact me, Zach Schermer. I’ll help you spot the best opportunities and guide you through every step of the process.
