House Flipping Business Plan

Download a Free Copy of Our Comprehensive 14-Page House Flipping Business Plan Template that you can use as a starting point for building your own house flipping business plan.

​A well-written business plan can be used as a road-map to plan out the near-term and long-term future of your business.

Your business plan can establish a course of action for your new business, including what you need to do to get started, and your business strategies and processes for managing your on-going business.

Creating realistic and quantifiable revenue and profit goals is the most important step of creating a business financial plan.  You will use your financial plan as a benchmark to track your actual revenue and profits to hold yourself accountable for achieving your desired financial growth.

A business plan can help communicate your companies' strategies, objectives and company goals to secure funding from your Business Partners and Lenders. ​

Here are the 5 components you should consider including in your House Flipping Business Plan:

​The Executive Summary of your business plan is the elevator pitch for your house flipping business.  The Executive Summary should be a brief overview of your business and summarize the key points of your business plan, and define your business goals.

Your Executive Summary is the first part of the business plan that your investors and lenders will read, so it needs to be concise, compelling and engaging so the readers will continue to read the remaining pages of your business plan.

Your Executive Summary should be tailored to the particular audience that you are pitching.  If you are pitching to a Private Money Lender or a Hard Money Lender, briefly discuss your business's value proposition, experience, competitive advantages, business goals and pitch your investors on why they should invest or lend with your company.

Although the Executive Summary is the first section of your business plan, it's often easiest to write the Executive Summary last once you have thought-out and written all of the key points of your plan.

​If you are pitching your business to a Private Money Investor, Hard Money Lender or potential business partner, an Executive Summary will provide a quick 'elevator pitch' to your investors so they can get a quick summary of your business, objectives and needs for funding.

Learn about the different Funding Options for House Flips

​Before you buy your first flip property you need to decide how you want to organize your business.  Are you going to be flipping houses as sole proprietor without creating a business entity?  Or are you going to create a business entity, such as an LLC, or a Corporation to mange your business.  

In the next Lesson, we will discuss the How to Create an Business Entity for House Flipping Business.

As the founder of your company, discuss your relevant work/business experiences that make you a strong leader of your company and discuss your role in the on-going operations of the company.  

There are a lot of different skill sets and experiences needed to flip houses, so it's important to build a team of experts that can help you along the way.  Your house flipping team doesn't necessarily have to be someone on your company's payroll.  Your house flipping team can be anyone, internal or external, that is integral in the on-going operation and future success of your company.  

Discuss the key players of your Project Team including your Acquisition Managers, Project Managers, Contractors, & Real Estate Agents.

​Understanding your market and buyers is essential to providing a home that meets your buyer's demands.  

First, identify the markets and neighborhoods that provide strong catalysts for demand such as strong job markets, good school districts, low crime rates, & proximity to amenities.

In Chapter 2, we will discuss in depth How to Perform Market Research for Flipping Houses.

Once you identify the market and neighborhoods to invest in, research the property types and finishes that best meets your buyers expectations.

Utilize online resources such as the MLS, Zillow.com, Redfin, etc. to research your market inventory, property values, and competition that is currently in the market.

It's also a good idea to walk-through as many open houses as possible so you can get exposure to the types of finishes and materials that your competition is utilizing in their flips.

If you need assistance, talk to your local realtor, and they will be able to help you identify the ideal markets, neighborhoods and homes that buyers are currently seeking.

In Chapter 2, we will discuss in depth How to Target Your Ideal House Flip Project.

In order for your business to grow and meet your project, revenue and profit goals, you will need to have a lead acquisition strategy to find leads and deals for your business.

Dedicate a section in your house flipping business plan to discussing your lead generation and acquisition strategies that your business utilizes to find leads, deals and projects for your business.

In Chapter 2, we will discuss different Lead Strategies for Finding House Flip Deals.

Once you find leads and deals for your business, you need to have a business process for analyzing deals to ensure your flip projects are profitable.

In your house flipping business plan, dedicate a section to discussing your due diligence process that your company undergoes to evaluate a potential flip property.  Your due diligence process should involve a property inspection, repair estimate, comparable sales analysis & maximum purchase price analysis.

For more information, we have created an entire chapter on How to Analyze House Flip Deals.

Once you get your flip projects under contract, you need to have business processes in place to help manage your projects to ensure that your projects are finished on-time and on-budget. You may want to consider utilizing a rehab project management software (like FlipperForce.com).

​In your house flipping business plan, dedicate a section to discussing your Project Management processes to manage your Contractors, Project Schedule & Budgets.

In Chapter 5, we discuss the processes necessary for Managing your Rehab projects.

Creating realistic and quantifiable project, revenue and profit goals is the most important step of creating a business financial plan.  You will use this financial plan as a benchmark to track your actual revenue and profits to hold yourself accountable for achieving your desired financial growth.

Create a short-term financial plan for your business that forecasts the number of projects, revenues & profits for your first 3 to 5 years of operation.  ​

The first step of establishing your company financial goals is to plan the number of projects you will flip in a calendar year.  Create a realistic goal of the number of projects that you and your team can take on in the first year, and then forecast your project growth for years 2, 3, 4 & 5.  

Once you have a realistic plan of the # of annual, projects you can forecast your revenue goals for each year.  

Your Revenue refers to the amount of sales revenue generated from selling your properties.  As a part of your market analysis, you need to determine the average resale value of your properties after you make the repairs.  Once you determine your average resale price (After Repair Value) you will multiply the number of projects by the average sales price to calculate your Annual Revenue.Annual Revenue = # of Projects per year * Average Sales Price.

Example:  In our first year, we are planning on flipping 4 properties w/ an average After Repair Value of $250,000.

Annual Revenue = 4  * $250,000
Annual Revenue = $1,000,000

Once you forecast your annual revenue, you can forecast your Net Income (Profit).

Generally, house flippers shoot for a profit % of 10% to 20% of the After Repair Value on a project.  To forecast your Net Income for the year, multiply your profit % by your forecasted annual revenue.

Net Income = Annual Revenue * Profit %

Example: In our first year, we are forecasting $1,000,000 in revenue w/ a 15% profit margin on all sales.

Net Income = $1,0000,000 * 15%
Net Income = $150,000
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Learn How Much Profit You Should Expect to Make on an Average House Flip

To meet your Company Goals & Objectives over the 3 to 5 year period,  your Team will have to execute your business strategies & processes.  Over the course of the first few years use your Business Plan as a gauge to track your business progress against business goals.

As your company grows you will need to consider strategic hires that will fit with your company culture and share our company values.

Your company will need to build strategic relationships and partnerships with local contractors, realtors & professionals to continue to grow your network of connections and grow your brand in the community.

​Your company will need to build systems or utilize house flipping software (like FlipperForce.com) that will help your team be more efficient which will ultimately support your ability to take on more projects to increase revenues and profitability.

Your company will need to build strategic relationships with Private Money Lenders & Hard Money Lenders to get funding for your projects.