In this 2024 house‑flipping tutorial, seasoned broker and mentor Joe Homs walks viewers through every stage of a successful flip, from mindset to sale. He begins by defining house flipping and stresses the importance of education, setting a target profit margin of roughly 10% per deal. He then explains current market dynamics—post‑2020 shifts, rising interest rates (from 2.5% to 7‑8%), and persistently low inventory—emphasizing thorough local market research, especially in his home base of Orange County. Financing options are outlined, ranging from cash and personal networks to hard‑money lenders, banks, 401(k)/Roth IRAs, and friends/family. Property selection advice covers comparable analysis, location nuances (ocean view proximity, street noise, railroad tracks), and bedroom count mismatches. Renovation planning is broken down by project scale, with guidance on material grades from standard Home Depot supplies to high‑end imported marble for luxury flips. He details contractor sourcing strategies—direct outreach, referrals, Craigslist, and on‑site interviews—advocating a middle‑ground bid approach. For the sale, Joe stresses professional staging, high‑quality photography, and robust marketing (MLS, single‑property sites, virtual tours). Pricing strategy focuses on aligning listing prices with recent comps to spark bidding wars, illustrated by a real‑world example where a $750k listing sold for $768k cash. The video concludes with a call to action for one‑on‑one mentorship, reinforcing that disciplined research, financing, renovation, and marketing can make house flipping a profitable venture in 2024.
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Today I'm giving you a step-by-step guide on how to successfully flip houses in the new year 2024, where market dynamics are constantly shifting and technology is continuously changing the game. Why let another year go by sitting on the sideline wishing you had done something? This could be your key to real estate success in 2024. If after this video you have more questions, Book some time with me one-on-one. Let's set the stage. Let's define house flipping for newcomers. And that's really all about education, learning from somebody that knows what they're doing, and following those instructions carefully. Because you're going to make your money on the purchase of this property, not the sale, but the purchase of the property. And going through the basic steps of purchasing, rehab, closing costs, commission, how much profit you want to make. And hopefully at the end of the day, all that works out for you. Let's discuss some potential profit margins for house flipping. And really kind of, it depends on your experience level. I like to do 10% and I like to have a good buffer in there so that I can achieve that 10% goal. At the end of the day, I may have a property that earns me 15%. And again, at the end of the day, the next property may earn me 7 or 8%, but I want to take those properties that I'm flipping and average them out to at least a 10% return on each property that I flip. So my number is 10%. What's your number? Comment below and let's find out. I've helped hundreds of people get started in real estate, and with over 40 years experience as a broker, investor, and mentor, I want to help you get started today. Step 1 is researching the market. Let's talk about what the importance is about thorough market research. It's probably the name of the game. If you don't know what's going on in a particular market that you're wanting to invest, then you're at the back of the line basically with everybody else. I have lots of people say, Joe, why don't you invest out of state and stuff? If I do that, I am an expert here in Orange County, California and the surrounding counties. If I go out of state, I'm, I'm in the back of the line like everybody else. I don't know if this house on this side of the railroad tracks is good or on that side of the railroad tracks is not good. I don't know my areas. Don't get me wrong, I will flip in any area. It all comes down to calculations. It's a math problem. It is, can I buy it at this price? Can I sell it at this price? Can I prove to myself and others that if I it at this price, there's 3 others that are on the market for the same price. So that's kind of what I'm looking at, whether it's a low-priced condominium or a higher-priced single-family in a luxury area, or even multi-family. Let's talk about the current effects of the housing market since 2020. 2020, everything got shut down, and so there was really not much going on. And things change from 2020, and now we've had in the last year interest rates rise from— man, I heard people getting loans for 2.5%. Now we're hovering around 7.5%, 8% for loans. The Fed's talking about reducing that. I'm hoping they get that back down to at least 5% to start stirring this market back up. The inventory hasn't changed. It's still very low inventory out there. So the people that are having this to sell, they're moving to other states, they've got a different job in a different county or area. Those people are putting their mark— their properties on the market and selling them, but it may be taking a little bit longer now to sell the property. And then like, like always, I've been seeing this for the last 5 years, the properties that are in the best shape, that have been rehabbed the best, are the ones that are selling the quickest. If you're putting your property on the market and You know, at the basic. If it needs new flooring and painting, please do so. If you put it on just like it is, it's not really going to attract that buyer that you're looking for. Let's talk about obtaining the necessary financing, and there's many, many ways you can do that. You're independently wealthy. Wow, I wish we all were. Okay, and then you could just pay cash for these properties, but The majority of you out there, the vast majority are not. So you have options. Family, friends is one option. You can do a regular, you know, bank deal. If you're flipping, you're probably going to get away with that once, but banks are in the business of making loans, and the minute they find out that you're flipping with their money, they're going to cut you off and say, no, we're not going to loan you any money. So that's where you have to go into hard money lenders. Hard money money lender is literally just loaning money to you on that particular property. They don't care so much about you. They care about that property, that there's enough margin in there that they know that they can get paid at the end of the day. Even if you go all the way to the end and can't sell that property for whatever reason, at least they have that cushion there that now you've rehabbed it, they lent you this amount, And they have plenty of cushion there in case they do have to foreclose on you or take the property back. So 401s, Roth IRAs, again friends and family, any of those sources for money are available out there. You just need to go find them and ask. Let's talk about choosing the right property, and that could be as simple as I'm looking at purchasing this property and it is about 4 or 5 streets away from having an ocean view. And the builder built these houses, they're not custom homes, they're tract homes, but the one you're looking at is 4 streets away from an ocean view. So do you think that that property is going to be worth the same as a property that literally has that ocean view? No, it's not. So you need to be careful when you're comping properties, doing comparable analysis on properties that you're actually comparing apples and apples, not apples and oranges. Another mistake people make is, Joe, I found a property, it's got 9 bedrooms. Okay, well great. What does everything else in that community have? 6 bedrooms. So now you've gone from 6 6 bedrooms to 9 bedrooms, great. It's functional, but it's really kind of obsolete for the neighborhood. So when you go to sell that, you have to think, okay, well, what's the appraiser going to do? He's going to look around that neighborhood and try to find 9 bedrooms, but he can't. So he's going to look at 6, and then he's going to guess on the other 3 bedrooms whether whatever price you sold it at is going to be a good comparison for him. So that's another thing to look out for. Is the house on a main street? Is there street noise? Is there a railroad track in the backyard running back there? Any type of noise issues? Are you above a landing or a takeoff from a major airport? All those issues play into the fact that are you buying the right property? And yes, you can buy properties like that, not a problem, but please make sure that you account for those things. At the end of the day, you're not going to get the normal top dollar of one that's not in that problem area. But you can sell it, not a problem, but you're not going to get the top dollar that you're looking for. Let's talk about renovation and improvements. And this has a lot to do with the property that you buy. So, you know, let's say you're flipping a mobile home and, you know, you start putting in, you know, regular flooring and paint and all that stuff. You could probably get away with buying the flooring at a Home Depot versus as you go up the scale, single family, a single family in a luxury community that at the end of the day you're hoping to get $2 or $3 million, which, you know, I keep saying that nowadays in California the average sales price is about $1 million right now. So it's not what it used to be versus something that, you know, let's say you're going to flip a property that's $15 to $20 million. So you're going to have to account for all that stuff. You have different grades of materials sourced from different vendors, different areas. If you're flipping a $15 million place, then the marble or quartz that you're using probably needs to be imported from Italy or something. It's not something you're going to find at Home Depot. Or some other, you know, floor and decor place or anything like that. That's just more of the standard stuff. So if you're going to look at the standard stuff, you're probably going to be looking at somewhere around $400,000 to $500,000 to let's say $1 million. And you can get away with using pretty much standard stuff. Anything after that, you're going to have to start looking for higher-end vendors who have higher-end materials to use in your project. Let's talk about how you go about choosing a contractor. And that's really, when you're flipping, that's probably the second most difficult thing to do. First is finding or sourcing the property. Number 2 is finding a good contractor. And I've done it different ways before. I've looked on Craigslist. I've had these, you know, contractors come over to a place I'm getting ready to rehab, and I've had them give me estimates. They've ranged from $40,000. This is my first deal. I just got my contractor's license yesterday. To a commercial contractor that does things commercially, the guy that's there is just an estimator and they're wanting $150,000 for the same amount or the scope of work that I've indicated. I like to end somewhere in the middle. Where I know that this person knows what they're doing. They just didn't wake up and get their license yesterday, and I don't want to pay a commercial contractor for all the overhead that he has. So I kind of try to end up in the middle, someplace around $60,000 to $70,000. Another good way is I literally drive into the neighborhood. There's always somebody working on Somebody's house, knock on the door. Hey, I've got a house that I'm rehabbing down the street. Can I bug you guys for a minute? What are you doing? Oh, we're rehabbing the kitchen, we're rehabbing the bathroom, we're rehabbing whatever on this place. Oh great, are you a contractor? No, but I work for one. I go, are you like the contractor you're working with? So kind of interview the subcontractors. And see who they will refer you to. And that's a good way to do it as well. So, and then you call these people out and have them come out and give you a bid and go from there. Refer references from a friend or another flipper that, you know, does flipping properties. If they want to refer you their contractor, then that's awesome. That's, that's a really good referral. At that point, if it's from another flipper, you'll find that a lot of flippers don't do referrals because if they're working on your project, then they're not working on theirs. So they want to keep them working on their projects, so they probably are not going to refer you out. So just try— just drive around and contact some people that are working in the area. Go on Craigslist. I haven't found like Angie's List any help. Again, you'll find more of the what I call the commercial type of contractor, big overhead, that are that are on those websites. Let's talk about selling a property, which everybody wants to do at the end of the day, obviously. So selling the property, you have to make it look as attractive as possible. You need to have that wow factor. It starts on the outside, so good landscaping on the outside, and then it just travels in. The inside as well. So you've done your part and your contractor has done their part. I always go the next step and I stage the home. It's a lot easier for somebody as they're walking in to see that the furniture is placed in a particular area, it's modern furniture, you've got a professional staging company that's staging the place. They know what it looks like good at the end of the day. It's like walking into A model home from a builder who's built 3 or 4 model homes, they're all staged. They're always staged. They want you to see what this place looks like. Okay, it's difficult when you walk in and there's literally just 4 walls staring at you. It's hard to imagine, well, I can put my bed here, or, well, wait a minute, maybe I can put it there. When you walk in and it's all done for you and you see it, you can see what it's going to look like at the end of the day. So professional staging, professional photos is another. So I mean, I'm a full-time real estate agent and I list homes myself. Usually list my properties that I'm flipping. I always hire a professional. I don't use my camera. I know cameras have gotten on iPhones and Androids have gotten tremendously good, but at the end of the day, they're not as good as having a professional go over there who does this every day and can edit the photos to make them look like a million dollars. You look at these photos online, if they've been done professionally, you look at that and you go, wow, that's amazing, I need to go over there and take a look at that place. And then you go over and take a look at it and see, see it in reality. But pictures are worth every penny that you pay for them, and it's not— honestly, it's not that expensive. Lastly, is the real estate agent listing the property for you? What kind of marketing are they going to do at the end of the day? Are they going to put it on the MLS? Are they going to stream it out to other websites? Are they going to do a single property website for you? Do they do virtual tours? All these questions need to be asked of the agent. And you want to pick an experienced agent that knows what they're doing. I hate to continue to pick on brand new people, but those brand new people should be partnering up with experienced people and learning the ropes before at the end of the day somebody says, you're hired because it sounds like and it looks like from your past history, what you look like, you know what you're doing. So those are the things that I would look out for when I'm listing a home and getting it ready for sale. Let's talk about pricing. Pricing to me is super, super important. And yes, everybody wants $1 million for their house. But if I look on the MLS and everything within the same parameters as what you're selling is selling for $750,000, Then I'm going to suggest that you put it on the market for $750,000. Okay? The advantage that I have as a flipper is I am flipping a, literally a brand new home. Okay? So if I look on the market and I'm selling the property for $750,000 and everything else is selling for $750,000, whose house do you think those buyers are going to come over to first? Who do you think is going to get the best offer? It's going to be me. I just recently ran into a perfect example. We listed the home at $750,000. There was 2 other properties on the market for the same price. We had 6, 7 offers, and then that's the time where you start a bidding war. And we ended up selling that property for— it started out $750,000, we sold it for $768,000. cash. We did have another higher offer, but again, this was a cash offer willing to close in 2 weeks instead of a financed offer that would close anywhere between 30 and 45 days, have to go through an appraisal process. There's just a lot more there. We decided to accept that $768,000 offer and closed in 2 weeks. Flipping houses in 2024 can be very profitable venture if you're willing to put in the time, effort, and necessary research. By understanding the market, securing the right financing, choosing a suitable property, managing renovations effectively, and marketing the property efficiently, you can tap into the real estate market's potential. Remember, every flip offers learning experiences that will only make your next one more successful.
