Building A Custom House to Flip for Profit

The idea of a custom home is to build a house that fits your particular tastes for your residence. But there are instances when you are building a custom house, not for yourself, but as an investment to flip for profit. Doing this can be very tricky as you don’t know what your potential buyer will want exactly, and what you consider to be a custom home will not precisely be custom for the buyer. In such a tricky situation, it is essential to know the right steps if you are to recoup your investments and make a profit off your custom house. Here are the things you need to take note of to do that.

What is House Flipping

House flipping is when an investor builds or buys a property only with the intention of reselling it as quickly as possible for profit. This has become a huge and profitable real estate business in recent years and will only keep rising. In 2019 alone, over six percent of house sales were flipped properties. There are different ways in which a house can be flipped. One is to buy the home, renovate and update it, then sell it at a profit. Another is to buy a house in a hot real estate market, hold on to it for a few months, then sell it for profit without any update or renovation. The third is to build the house, then sell it upon completion. The third option has many advantages and when done right it is less risky than buying a home and renovating it. One advantage is that you can flip the house like brand new since it has never been lived in, which makes it more attractive to your buyers.

Tip for Building and Flipping a House For Property

Have a well-defined budget: A budget is essential for any construction process, but when you are building a custom home to sell, it is compulsory if you want to make a profit. Having a budget will let you avoid unnecessary cost overruns, know the risk you are assuming, and help you with financing. This is important because lenders prefer a borrower who knows what he is getting into. So, breakdown all the construction expenses to the smallest details.

Assemble a team: the team can make or break your construction process. If you are a newbie in the construction business with no experience in house building, then you should pay attention to this. Your team includes your banker, building contractor, and sales help. Don’t be afraid to sample opinions and get recommendations before selecting them. Remember, this is your resource.

Location: The location is arguably the most important thing apart from the house itself. The buyers are not only buying the wonderful custom home you have built; they are buying your location too. So, go for a premium location that offers all the things that anyone with an interest in a custom home like yours will like. For instance, if your custom home is a family home, an area with a low crime rate, good schools, favorable tax rates, and other relevant details are essential. Also, when picking a location, you should look into areas that show the increased sale of the estate, employment growth, and other signs that the area is thriving. If many houses are on sale in an area, it might be a sign of a depressed economy or another problem. So don’t rush into house building in the area, until you are very familiar with the location.

Design the right blueprint: Most builders make the mistake of designing a house so unique that it becomes impossible or difficult to flip. Avoid this mistake. Even though you’re planning a custom home, always consider the current developments and trends in the housing market and find a way to incorporate some of them into your custom house. All the details such as the type of bathrooms that are appreciating in the market, the features of the homes that are selling fast, layouts, and floor plans. All of this should be considered and utilized in a customized way for your construction. This usually means going for the right architects and designers, and working overtime with them to craft a house that would be agreeable and desirable to a lot of people. Remember, you’re not building the house to live in there, it is for sale.

Set mini-deadlines for milestones: nothing pushes the construction process forward like using deadlines. Before you even start your project, discuss with your contractor, and set dates for completion of specific works in the house. For instance, dates to pour the foundation, drywall the home, frame the house, complete the building, etc. Such deadlines before the work starts will be a major drive for you and the contractor as well.

Understand the market: The real estate market is very much like the stock market; there is no stability. Maybe you have just built a house and flipped it for a considerable profit. It is possible to let the euphoria get to you and lead you to make your next investment, perhaps in the same area. This is not always a good choice. The period between selling one house and building another is long enough for the market to change drastically. So make sure you fully understand the real estate trends before getting into the business of house flipping. It will help if you work with a real estate agent that is familiar with the area. When picking a real estate agent, go for experience and track records, even if that means a little costlier.

Explore options to lower initial capital: When building a custom house for sale, the only thing you should not cut back on is the quality. Apart from that, look for ways to reduce initial capital. Take advantage of any incentive offered by the builder and also make sure you have an excellent credit score as this will help you in securing more favorable finance. 


When you choose to go into the business of flipping houses, you should start networking with potential buyers even before the home is finished. Learn to identify a good deal and don’t shoot for a profit margin that is too high, this is a business with risks attached, and you should be capable of handling such risks efficiently. For more information on real estate and home remodeling visit the link above.