Want To Flip Your First House? Start Here.

You’ve likely seen enough renovation TV shows to know the basics of home flipping: buy low, renovate, and sell high. However, what you often don’t see is how these deals are funded.

The truth is, few beginner flippers can buy a property outright. Instead, they finance it with a hard money loan. These are short-term loans that are approved based on the property’s value and expected after-repair value (ARV), rather than your personal income or creditworthiness.

At ABL, we’ve financed countless fix-and-flip properties over the last 15+ years. As a result, we know how to spot opportunities and guide investors through projects from start to finish.

How Does House Flipping Work?

Flipping a house is a short-term real estate investment strategy. It involves buying a distressed property at below-market value, making strategic renovations, and selling for a profit. Typically, home flippers try to be in and out of a deal within a year.

Steps to Flipping Your First House

Of course, understanding how to begin flipping houses can be easier said than done. To ensure your first flip is a success, follow these steps:

1. Set a Budget

Before spending much time and effort on a fix-and-flip project, the first step is to determine your budget. How much are you willing and able to invest? Be conservative and don’t overleverage yourself. The last thing you want is to be in over your head on your first flip. 

2. Research the Market

Next, you should look for a housing market with a stable economy, population growth, and an active real estate market. These features help ensure that you can not only buy a property but also sell it for a profit once renovations are complete. 

3. Find the Right Property

Once you’ve selected a market, you can pinpoint a property with high return potential. Look for distressed properties and motivated sellers who may be willing to sell at a discount, such as those facing foreclosure, bankruptcy, divorce, etc.

4. Make a Renovation Plan

How will you renovate the property? Create a detailed plan with a timeline and budget. From there, you can also estimate the property’s after-repair value (ARV), which is crucial in assessing the project’s potential return on investment (ROI) and securing funding. 

5. Secure Funding

Now that you have a property and renovation project in mind, the next step is to apply for financing from a hard money lender like ABL. We offer dedicated fix-and-flip loans of anywhere from $75,000 to $50 million with terms of 12-24 months.  

6. Close the Deal

Once financing is secured, you can then make an offer on the home. The seller will accept, decline, or make a counteroffer. Some back-and-forth is normal, so be prepared to negotiate. When both parties agree on a purchase contract, you can sign on the dotted line.

7. Hire Contractors

Now it’s time to get to work. After your first construction draw, you can hire contractors to start the renovation and/or do some of the work yourself. Try to stick to the renovation schedule, but adjust it as needed. If you choose ABL, we’ll be there to support you every step of the way.

8. Sell for a Profit

As soon as renovations are complete, you’re ready to market the property for sale. The faster you can sell, the lower your total holding costs will be and the higher your final return. Use the sale proceeds to pay off your remaining loan balance and pocket the rest as profit.

Where to Flip Houses

Now that you know the basics behind flipping a house, you may wonder where to invest. 

While flipping activity and profits have fallen recently, here are the top ten states with the highest share of flipped homes as of Q3 2025 and their average gross ROI, according to ATTOM:

• Georgia (22.9%)
• Delaware (36.0%)
• Arizona (14.3%)
• Ohio (31.3%)
• Alabama (43.7%)
• South Carolina (23.7%)
• Texas (5.1%)
• Nevada (14.9%)
• Utah (8.3%)
• Tennessee (47.2%)

Common Beginner Mistakes to Avoid

As a first-time home flipper, it’s important to avoid common pitfalls. After all, a single mistake could ruin an otherwise good deal. Here’s what not to do:

Underestimating Renovation and Holding Costs

Get real quotes from contractors to accurately estimate renovation costs. Do the same for holding costs like utilities, insurance, property taxes, etc. It’s better to overestimate expenses and be pleasantly surprised than to underestimate them and be disappointed. 

Overestimating After-Repair Value (ARV)

Don’t inflate your ARV estimates. Otherwise, you could skew your return projections. Instead, you should base ARVs on similar nearby properties that recently sold (aka comps). 

Setting Unrealistic Timelines

Construction projects are known for running longer than expected. To account for this, it’s recommended to add some time cushion into your schedule to absorb unexpected delays.

Skipping Due Diligence

Buying a distressed property can be risky. Before you commit, it’s important to learn everything you can about the property by getting a professional home inspection. It can alert you to red flags and, at the very least, help you know what you’re getting into. 

Doing Everything Yourself

The best real estate investors work with a team. That way, you can benefit from others’ expertise and optimize your time. For example, you may want to partner with a real estate agent, a lawyer, contractors, and a reliable hard money lender like ABL. 

Pre-Qualify for a Fix-and-Flip Loan from ABL

Does flipping your first house feel more doable now? Good! With the right help, you can buy your first property to flip in no time. Start by following the steps outlined in this article. Then, when you need financing, ABL is ready to help with its fast, flexible loan programs.

Pre-qualify for an ABL loan today to estimate your total fix-and-flip budget and to get things moving. Once we have your full application, we can close your loan in as few as 10 days.