Est. net profit
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after selling & carrying costs
Business Plan · Dallas / DFW · Full-time
A flip is three jobs: find a house far below market, make it beautiful on budget and on time, and sell it fast. The money is made on the buy — the renovation only protects it. You have capital and full focus, so you can do a real deal in months, not years. But the first flip isn't for showing off; it's for learning without blowing up the bankroll. Each card is something to do, checked off as you go.
The one number that keeps you safe — the 70% rule
Max offer = (ARV × 0.70) − repair cost
ARV = After-Repair Value (what it sells for fixed up, from recent sold comps). The 30% haircut is your profit and your cushion for the surprises you didn't see. Run it on every single deal — the calculator below does it for you.
Deal calculator — is this a real deal?
Type the numbers for any house. Green means the margin survives a normal amount of bad luck.
Max you should offer (70% rule)
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Est. net profit
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after selling & carrying costs
Return on the money in
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cash + rehab at risk
Rough model: selling costs ≈ 8% of ARV (agent + closing); financing + holding ≈ 12%/yr on price + rehab (hard money, taxes, insurance, utilities). Real Dallas property tax runs ~2.2–2.7%/yr, so slow flips bleed. Confirm every number with your agent, lender and contractor.
You're funded and full-time, so start like a business, not a hobby. This is a week of paperwork that protects everything after it.
File the LLC on TX SOSDirect (~$300), get a free EIN from the IRS, and open a dedicated bank account. Every dollar of the flip goes through the business — never mixed with personal money. This is also what lenders and title companies expect to see.
Flip profit is ordinary income + self-employment tax, not the low capital-gains rate — a big surprise if nobody warns you. The good news: Texas has no state income tax. Ask about "dealer status," which costs to capitalize, and quarterly estimated taxes. Get this right before deal #1, not at tax time.
Buy every property through a title company so liens and ownership are clean, keep a Texas real-estate attorney on call for contracts, and get a builder's-risk / vacant-property insurance quote — a normal homeowner policy won't cover a vacant house under renovation.
Pick 1–2 entry-level zones (e.g. Oak Cliff, Pleasant Grove, Garland, Mesquite, Balch Springs, parts of Irving), a price band you can afford in cash-plus-loan, and one house type: 3 bed / 2 bath brick, cosmetic rehab, no additions. A tight box makes you fast and expert instead of scattered.
Weeks 1–6, in parallel. You've already got the hands — that's a real edge on cost, quality and speed. But the skill that makes the money is finding a house priced well below what it's worth. Run these until a good deal is obvious to you on sight.
Texas is a non-disclosure state: sold prices aren't public, so Zillow "estimates" are unreliable. Either partner day-one with an investor-friendly agent who pulls MLS comps and a CMA for you, or get your own TX real-estate license for direct MLS access. Accurate ARV is the whole game — this is not optional.
In your buy-box zones, alert on "as-is," "cash only," "investor special," "needs TLC," price drops, and anything sitting 60+ days. Lower discount than off-market, but you can inspect and close cleanly — the right speed for a first deal.
A house sells cheap because the seller has a problem — speed or condition. Drive for dollars (app: DealMachine) through older neighborhoods for neglected houses, then reach owners directly. Also chase absentee-owner, probate, and pre-foreclosure lists with mail. Most work, least competition, best price.
Wholesalers find distressed sellers and sell you the contract for a fee — deals land in your inbox daily. Free to join (you meet them at meetups). You don't have to buy; at first just study every one to calibrate your eye.
Search Meetup/Facebook for "Dallas real estate investing," "fix and flip DFW," and find DFW REIA. Go to two this month. In one room you'll find your general contractor, hard-money lenders, an agent, and experienced flippers. Collect a shortlist of each — these people are your suppliers and your first partner.
Run the calculator on every deal the wholesalers and MLS alerts send you: estimate ARV from sold comps, estimate rehab, check the 70% number. After ~30 you'll feel a good deal instantly and stop overpaying. Cheapest tuition in this business.
From the meetups, find someone doing a flip now and offer to help / observe for free. Seeing one real deal — offer, financing, contractor draws, listing — end to end is worth more than any course. Read alongside it: BiggerPockets and J Scott's flipping / rehab-cost books.
Months 2–4. You can afford to buy outright — but a solo, all-in first flip is how beginners lose the bankroll. Pick one of these guardrails.
Best first move — partner up. Do deal #1 as a joint venture with an experienced Dallas flipper: you put in half the capital and run the renovation, they bring the deal flow and the playbook, you split the profit. You learn the whole machine on a real deal with half the risk — then go solo on deal #2.
Agree on a simple written split before anything. Lower risk, fastest learning, and their reputation gets you a better contractor and lender than you'd get alone.
Buy as an owner-occupant with as little as 3.5% down, move in within 60 days, and renovate while you live there. Stay at least 12 months (the FHA rule), ideally 24: after 2 years, up to $250k of the profit is tax-free. Slower, but it ties up the least cash, so the rest of your capital can run regular flips at the same time.
Open the Live-in flip tab: the rules, both options side by side, and the steps →
If you go alone: cosmetic work only (paint, floors, kitchen, baths, fixtures — no foundation jobs, no additions, no layout changes), and only a deal whose margin survives a $15k repair surprise. Buy below your max offer, never right at it.
Your own hands make this your strongest solo play — you self-perform the cosmetic work, keep the labor margin instead of paying it out, and control quality yourself.
A cheap house is only cheap if the discount is real. These are the DFW-specific costs that hide under a pretty listing and eat a whole flip's profit. Inspect for every one before you commit.
North Texas sits on expansive clay soil that swells and shrinks, cracking slab foundations. Look for sloping floors, doors that won't latch, and zig-zag cracks in the brick. Always get a foundation evaluation.
Houses built before ~1975 (much of East Dallas, Oak Cliff) have cast-iron drain pipes that rot and collapse under the concrete. Pay for a sewer camera + hydrostatic test — you cannot see this from inside the house.
DFW is hail country. Check the roof's age and for hail bruising — buyers' inspectors will. Sometimes a recent storm means the prior owner's insurance already owes a new roof; ask.
40 °C summers mean a dead or ancient AC system kills the sale. Verify the age and condition of the full HVAC system, not just that it turns on.
Foundation, sewer-scope, roof, HVAC — plus a general inspection. On a below-market house these findings are your negotiating leverage; skipping them is how the discount turns into a loss.
Numbers checked, team ready, guardrail chosen. Now execute — fast and disciplined.
Below-market houses sell to whoever can close fast. Have it ready: cash for the win, or a hard-money lender (short-term, against the deal, ~10–12% + points) so you keep liquidity. Meet 2–3 lenders in Phase 1 and know their terms cold.
First deal, be conservative — buy under your max offer. Add a 15% contingency to the rehab budget. If the numbers are tight or an inspection scares you, walk. There is always another house.
Buyers decide in the kitchen, bathrooms, floors, fresh neutral paint, lighting, and curb appeal — spend there. Do not over-improve past what the block's sold comps support: quartz in a $200k neighborhood is money you'll never get back. Design for the buyer, not your taste.
Your edge: do the cosmetic work with your own hands to keep the labor margin, and hire out the licensed trades — electrical, plumbing, HVAC, roof. For anything you sub, use one document: full scope, a fixed price broken into line items (a "schedule of values"), payments released by milestone, never ahead of the work. Every extra week is holding cost (loan interest + Dallas's ~2.5% property tax), so push the schedule hard.
Staging + professional photos pay for themselves; most buyers fall in love online first. List with your agent the moment it's done. A fast sale locks the profit before holding costs eat it.
Write down what the deal really cost — purchase, rehab, holding, selling, net profit — against your estimate. That one correction makes deal #2 sharper. Then repeat, scaling toward 3–4 flips a year with the same agent and lender. The scaling move for you: build a repeat crew you manage — you shift from swinging the hammer on every job to running the jobs, and from one deal at a time to several in parallel. (Option: keep a strong one as a rental — the "BRRRR" play — for cash flow instead of selling.)
Your real numbers beat any online estimate. Start from these DFW ballparks, then overwrite every rate with what your subs and suppliers actually quote you — after a job or two, this sheet becomes your edge. Everything you type is saved on this device. Hit “Send total → calculator” to drop the budget straight into the deal math on the Plan tab.
Cosmetic — interior
You self-perform most of this — so push each rate toward materials-only wherever you're supplying the labor.
Kitchen & baths — where buyers decide
Systems — mostly licensed trades
Exterior & curb appeal — the first photo
Dallas big-ticket — only if the inspection finds it
Leave at $0 by default. If an inspection flags it, plug the real number in — these can erase a deal. (See the silent killers on the Plan tab.)
Soft costs & cushion
First, the myth. There's no program where you live somewhere for a year and the state pays for your housing. The one-year rule people mean is usually in-state tuition (12 months in Texas gets you resident rates). For a house, the reward for living in the one you flip comes from three real rules: a federal loan, a Texas tax break and a federal tax break. Use all three on the same house and you have a live-in flip.
Day 0
Buy with 3.5% down
An FHA loan, which only goes to people who will live in the house.
Federal loanBy day 60
Move in + file homestead
Property tax drops (often $1.5–3k/yr on a starter home), and yearly appraisal increases are capped at 10%.
Texas taxMonth 12
FHA promise kept
You're free to move and rent it out. Sell after this and the profit is a long-term capital gain (usually 15%).
Federal loanMonth 24
Sell, tax-free
Lived there 2 of the last 5 years? Up to $250k of the gain is tax-free.
IRS §121Same house, two ways: regular flip vs. live-in
Plug in one real deal. Both columns use the same house. What changes is the financing, the time and the tax.
The house
Regular flip
Taxed as business income: your bracket plus ~14% self-employment tax.
Live-in flip
Rough model. Both: selling ≈ 8% of ARV, same sale price at the end (no appreciation), buy-side closing costs left out. Regular flip: all cash, carrying ≈ 12%/yr of price + rehab, profit taxed as ordinary income + self-employment tax (ignores deductions like QBI). Live-in: 3.5% down, FHA mortgage insurance 1.75% upfront + 0.55%/yr, interest only (principal you pay down comes back at the sale), Dallas property tax ≈ 2.3% reduced by the homestead exemption (homestead saves ≈ —/yr here), insurance + upkeep ≈ $300/mo.
If you go this way, this is the order. Most of the risk is in step 1: getting the loan approved.
FHA needs a credit score of 580+ (many lenders want 620) and documented income that covers the payment. Flip profits only count once you have 2 years of tax returns, so at the start that usually means a W-2 job, or a family member as a non-occupant co-borrower (FHA allows it). Thin US credit? Open a secured card now; it takes months to build.
Then get pre-approved by a lender who actually closes 203(k) loans. Many don't.
Plain FHA needs a house that's livable on day one. Ugly is fine, broken isn't. You pay for the rehab in cash and do the work yourself. With your skills, this is usually the better fit.
FHA 203(k) puts the purchase and the renovation in one 3.5%-down loan, but the rehab money is paid out in stages, normally to licensed contractors. Limited 203(k) covers non-structural work up to ~$75k; Standard handles bigger jobs with a HUD consultant. The toggle in the calculator shows both.
FHA requires the house to be your primary residence within 60 days, and that you plan to stay at least 12 months. It's a federal loan: renting it out from day one while claiming you live there is mortgage fraud. After 12 months you're free to stay, or to move out and rent it.
It's free and online at dallascad.org (Collin, Tarrant and Denton counties have their own appraisal districts). Your main home gets $140k off its value for school taxes, plus local percentage exemptions, and yearly appraisal increases are capped at 10%. File as soon as you move in; Texas lets you apply in the same year you buy.
You have to live there. Nobody said alone. In a 3-bed/2-bath, one or two roommates can cover a big part of the mortgage. Use a written lease and keep records: the rent is taxable income, and renting rooms has a small depreciation effect when you sell, so tell your CPA. Put the amount in the calculator's "roommate rent" box and see how much the math changes.
TDHCA (state) gives up to 5% of the loan. My First Texas Home is for first-time buyers, meaning no home owned in the last 3 years; My Choice Texas Home is for anyone. The DFW income cap is about $121k for 1–2 people. The help is either a 0% second loan you repay when you sell, or one that's forgiven only after 3 years, and it comes with a higher mortgage rate.
TSAHC (state) gives 3–5% as a grant you never repay or as a loan forgiven after 3 years. The grant also raises your rate. The "Heroes" version is for teachers, first responders and US veterans; IDF service doesn't count.
DHAP (City of Dallas) gives up to $50–60k, but only inside Dallas city limits, with income at or below 80% of the area median (~$68k for one person) and a price cap around $342k. It's forgiven a little each year you live there, so if you sell early you pay back most of it.
For a 24-month live-in, the realistic pick is the TSAHC grant, and only if the rate increase is small. If you'll stay 3+ years, the forgivable options also work. Each program requires a homebuyer-education course and a lender that participates in it.
If you owned it and lived in it 2 of the last 5 years, up to $250,000 of gain is tax-free ($500k for a married couple filing jointly). You can use this once every 2 years. Sell between months 13 and 24 and you pay the long-term capital-gains rate (usually 15%). If a new job or a health issue forces you to move early, you may still get part of the exclusion. Keep every rehab receipt: it raises your cost basis. Rules: IRS Topic 701.
You don't have to choose. Do both. The live-in needs only a small down payment, so most of your capital stays free for regular flips through the LLC. Live in one house and flip others. Every 2 years, sell the live-in tax-free and move into the next ugly house. The next one usually needs a conventional owner-occupant loan (~5% down), because FHA generally allows only one FHA loan at a time.