How to Flip a House

As a small business owner you’re entrepreneurial. In addition to your day to day business, you may have interest in investing in other things, like real estate.

This is advice from one of the top real estate agents in the Bay Area, Trang Dunlap, on how to flip a property.

She is featured on our June 5th, 2017 show which you can find here.

Why are you flipping?

You are flipping a house in order to improve home values in that neighborhood. In an escalating market, your renovated home should set the new record for comparable homes.

Trang says, “Your neighbor will appreciate you!” Because their home value will improve.

Know your comps

This is easy, but important. Before buying, you should know all of the recent sale prices of homes in the area with comparable square footage, features and condition. You can search sites like Zillow, Redfin or simply ask your real estate agent.

Be prepared to break even – but try to set the record

When you determine how much you will pay for the building, after reviewing the comps you need to feel comfortable that in the worst case scenario you will break even on the property. In the best case scenario you should be setting the new high record for comparable homes. This is where you will really make money.

Find a deal that nobody else can find:

Comb Auction sites like

You can also send letters to homeowners, asking if they are thinking of selling.

Why? With the internet providing easy access to buyers of all backgrounds, and with a booming real estate market in the Bay Area, competition is fierce. Buying off-market can be a great way to get the price you need.

You can find more information about auction homes here

Bid low and be patient

Don’t hesitate to pass up a property until you find one at the right price.

Trang has gotten call-backs from the Bank or Auction Site on several of her properties – they have accepted her lower offer after the higher bid fell out of contract. She even bought the land that she built her home on this way, with an offer that was $100,000 lower than the winning offer!

Count all the Costs – Net Profit is what matters

Selling Price (minus)

  • Purchase price

  • Closing costs (commission & fees adding up to 4-7% of your purchase price)

  • Cost to repair (bring a contractor you trust – a good estimate is good enough)

  • Carrying costs (utilities, insurance, etc – for the time that you own the home)

  • Financing charges (unless you pay all cash, you will have monthly interest payments)

  • Capital Gains tax (this is substantially reduced if you hold the property more than a year)

= Net Profit


It is possible to finance up to 90% of the purchase price from ‘Hard Money Lenders’, depending on your credit and your ability to make the monthly interest payments until the house is sold. This can be very risky and will decrease your profit margin. Trang recommends using as much cash as you can in order to decrease your risk, and increase your profit margin.

Traditional bank loans are great if you can get them, but in the case of properties needing significant repairs, or being purchased at auctions, they are often unwilling. Your credit will also be much more closely examined and the process is time consuming, taking up to 30 days.

Speed, Speed, Speed

In addition to all of the costs you have to carry each month on the house, the market can change on you during the months that you’re working on the house. Now all of your math is no longer correct.

So when it comes down to making money, flipping homes is all about speed.

Set realistic profit targets

I know everyone wants 10% net return, but nowadays it’s really hard to make 10% net return.

It is OK to make $10,000 or even less on your first flip property. The main thing is to gain experience. It is not a good idea to rely on your investment income as your primary income until you have completed at least several transactions.

Trang says, “If you're just starting out new and your goal is $100k it's tough. You need experience to make that $1mm deal… But once you have experience you can go into development, splitting lots, condo sites (building a new house behind an old one) … There is a lot of money in this business”

Because Trang is experienced, she aims to earn $20-30k for a month’s work. However, she is using cash to buy the houses, saving on closing costs because she is the agent, and she has her comps down cold. The main thing is not to be greedy … and especially at first, be prepared to break even.


Don’t give up! It takes hustle.

If you gain experience and make smart choices, there is a lot of money to be made in flipping homes.