Wanna Get Into House Flipping? Start Smart in a Soft Market

One of the best ways to break into real estate, without relying on traditional income qualifications, is by flipping houses. Fix & Flip loans are based on your credit score, your project budget, and the property’s after-repair value (ARV), not your W-2s.

If you’ve got some cash, love remodeling or designing homes, and know good contractors, flipping might be the smartest way to build your real estate portfolio. I’ve flipped several properties and renovated every home I’ve lived in and I’ve made very good money doing it.

Thinking about your first flip? Or ready to scale up?

In 2025’s soft market, smart flippers can thrive. Inventory is up. Competition is down. And if you know how to budget, buy right, and pivot when needed, you can build serious equity and real income.

But flipping isn’t easy money. It takes planning, math, and strategy.

Here’s how to do it right.

Why Soft Markets Create Opportunity

The Upside:

More inventory

Motivated sellers

Less competition

The Reality:

Slower sales

Pickier buyers

Sellers with unrealistic expectations

This isn’t a market for hype or shortcuts. It’s a time for grounded, well-executed deals. That’s how you win.

Step 1: Buy Smart (Hyper-Local Smart)

Your profit is made when you buy. Not when you sell. That means:

• Stick to strong neighborhoods

• Avoid homes with resale-killers (busy streets, bad layouts)

• Look for cosmetic fixers with solid bones

 Skip homes with:

• GE electrical panels

• Cast iron plumbing

• 40-year-old roofs

• Old behemoth heating systems hiding in the basement

• Basements that require adding new plumbing (reconfiguring an old bath is fine, but adding plumbing is a cost and a headache you don’t want as a new flipper)

Know Your Micro Market

I’ve seen it firsthand: A friend bought during a hot streak, ran comps on the whole city instead of the block, and ended up stuck. By the time she finished her rehab, the market had shifted—and the sale price she needed wasn’t realistic anymore.

Learn from her:

1. Get hyper-local comps—use only homes on the same block or area.

2. Don’t overpay. If your “deal” is priced too close to turnkey comps, there may be no margin.

3. Know your actual costs. Drywall and other materials have doubled since 2021.

4. Plan for concessions. Today’s buyers expect seller credits and rate buydowns.

5. Be realistic about timelines. From purchase to resale, plan on at least 6 months.

6. Market it properly. Don’t DIY your listing. Use staging, pro photography, aerials, and open houses.

   
   

Step 2: Stick to the 70% Rule

The 70% Rule protects your margin and limits your risk.

Total investment (purchase + rehab) should be ≤ 70% of the After Repair Value (ARV)

Example:

• ARV: $400,000

• Max total investment: $280,000

• That leaves room for financing, closing costs, and profit

Step 3: Use Fix & Flip Loans to Maximize Leverage

You don’t need all cash to flip a home. Fix & Flip loans are a great tool—when you know how to use them.

For First-Time Flippers

• 15% down on total project (purchase + rehab)

• Finance up to 85% of the total cost

• Rehab budget is rolled into the loan

• Funds disbursed in draws—you get reimbursed as work is completed

• Slightly higher rates until you gain experience

You’ll need some working capital to get started before those first draw funds are released.

For Experienced Flippers

• 10% down (sometimes less)

• 100% of rehab financed

• Lower rates and costs

• Faster approvals and draws

Pomeroy Lending works with both new and seasoned flippers. We help structure deals and get you funded fast.

Don’t Forget Carry Costs

Fix & Flip loans are short-term and interest-only—but they still add up fast.

Always budget for at least 6 months of carrying costs:

• Monthly loan payments – usually interest-only, based on funds drawn

• Property taxes – not typically escrowed, but due at closing or quarterly

• Builder’s risk insurance – not the same as homeowner’s insurance

• Utilities – even during rehab

• HOA dues, if applicable

Even if you plan to flip in 90 days, budget for 180. Markets shift.

Contractors delay. Buyers stall. Carry costs can eat your margin if you’re not prepared.

Step 4: Budget with Discipline

The fastest way to kill a flip? Overspending.

Budget Smarter:

• Add a 10–15% contingency buffer

• Assume labor = 50% of the rehab budget

• Get multiple bids for everything

• Shop smart: Home Depot, Floor & Decor, local stone yards, overstock sales

• Stick with neutral, clean, resale-friendly finishes

• Avoid permitted renovations if you can—permits cause delays and can kill your bottom line

• Don’t over-personalize—save the bold color choices for your own home

I’ve saved thousands using leftover quartz from high-end fabricators, paired with drop-in sinks. It looks custom—and costs half as much.

Step 5: Always Have a Backup Plan

This is your safety net... and sometimes, your new opportunity.

What if the flip doesn’t sell in 90+ days?

What if your price target doesn’t work anymore?

Always go in with Plan B and Plan C.

Backup Strategies:

• Mid-term rentals for traveling nurses or business travelers (3–6 months)

• Furnished short-term rentals (Airbnb, VRBO)

• 12-month traditional rental

• Room-by-room rentals or student housing

• Sober living facilities

• Senior care group homes

I’ve seen investors “pivot” into rentals and build wildly profitable businesses. What started as a fallback became their primary model.

And if you decide to keep the home, you’ll want to refinance your Fix & Flip loan into a long-term loan.

Pomeroy Lending can help with that too. Many of my clients start with flip financing and later move into a DSCR loan to hold the property as a rental.

Ask me how to structure both your entry and exit financing.

Ready to Flip?

Flipping houses can be an amazing wealth-building strategy—if you plan ahead.

At Pomeroy Lending, we help investors:

• Analyze deals

• Finance both acquisition and rehab

• Refinance into long-term loans if you hold the property

• Anticipate pitfalls and avoid costly mistakes

• Build in backup plans and real flexibility

Book a free consultation today

Let’s run your numbers, discuss financing options, and build a smart flipping strategy together.

You don’t need luck.

You need a plan.

And we’ve got your back.

📩 Email: liana@pomeroylending.com

📱 Call or Text: (303) 601-5197

🔗 Apply Online: pomeroylending.com

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Liana Pomeroy

Senior Mortgage Loan Advisor

NMLS #295506 | Powered by Xpert Home Lending NMLS #2179191

Equal Housing Lender | Licensed in CO, FL, CA, TN & TX

All loans subject to approval. Conditions apply.