Are you cut out to be a house flipper? Toronto Mortgage Broker Ingrid McGaughey

Are you cut out to be a house flipper?

House flipping for profit?

OK.  Truth: financially speaking, I lean to the conservative.  Years of working in the financial industry, advising clients in both credit and investing contexts, and seeing one or two stock market tumbles, have made me most comfortable with a steady and slow, buy and hold approach.  So when I saw the title of Mark Loeffler’s latest book, co-authored with Ian Szabo, I felt a little chill:  Fix & Flip: The Canadian How-To Guide for Buying, Renovating, and Selling Property for Fast Profit.  I love that it’s Canadian.  I’m all for “How-to” guides.  But “house flipping” and, even worse, “fast profit”?  Eek!

So, I knew I had to read it

As soon as I started in on the introduction, I was caught.   One of the first things they tackled is the commonly held idea that “flipping houses is fraught with risk”.  According to Mark and Ian, people who believe this are right, “if they don’t know what they’re doing”.  Ouch!   On the flip side (no pun intended), they also countered the commonly held view that “flipping houses is easy”.   They commented that there are often “fix-and-flip newbies who get stuck with an unsellable [and/or unprofitable] property on their hands”.  Somewhat mollified, I read on.

The voice of experience

I was reassured to find that the book was a balanced, well-thought out analysis of what house flipping is (“buying a property at the right price, adding value through renovations, and exiting the property with a profit”), and what house flipping isn’t (an easy, get-rich-quick scheme).   Both Mark and Ian have had lots of experience doing flips themselves, and they included a number of real-life examples both from their experience and from other real estate investors’.  What I liked about the examples was that although there were several positive, inspiring stories, others were cautionary tales of flips gone awry.   The book thoroughly covers everything from setting goals for your flip, how to go about it, what not to do, and finally, how to sell and market the finished product, depending on your exit strategy.

Incidentally, I think readers would be surprised to see that there weren’t any really huge numbers talked about in the projections of what one can earn on each flip.  A figure of $30,000 or so for each flip seemed to be the norm – although there were some outliers as well.  But again, the authors took care to note that big and fast profits are the rare exception, not the typical return.

Financing a real estate fix-and-flip

Naturally, I was curious whether their comments on financing a flip would fit with my experience in the industry.  Again, here they were very true-to-life.  Financing a property flip, particularly if you don’t have a track record, can be a challenge.   As they explained, you have to get creative.  If your “day job” income allows you to qualify to borrow the funds, and/or you are able to advance funds from your principal residence using a home equity line of credit, this may be all you need to get started.  If you don’t have your own money to finance the flip, you may have to look at other strategies.  Private mortgages (either sourced by you or through a mortgage broker), joint ventures, and combinations of all of the above are all covered in detail in the book.

In sum?

I loved the book and would definitely recommend it to anyone thinking of doing a real estate flip.

If you’d like to read more, check out the articles in the blog section of my website.  And if you end up reading the book, or have done a flip of your own, let me know what you think!

Photo [c] Benis Arapovic for


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