How To Flip Houses In Maryland: Step By Step (2024)

Learning how to flip houses in Maryland has become an attractive investment proposition. The state’s strong economy has facilitated an influx of real estate activity that bodes incredibly well for investors. On top of the recent activity, Maryland recently posted one of the highest foreclosure rates in the country, with one in every 2,283 housing units experiencing a foreclosure filing, according to ATTOM Data Solutions. That means savvy real estate investors should have an easier time finding deals and meeting the demands of more homebuyers.

If you want to capitalize on this opportunity, this guide will tell you everything you need to know for your flipping journey, including:

• What Is Flipping Houses?
• Maryland House Flipping Statistics
• How To Flip Houses In Maryland (7 Steps)
• How To Find Houses To Flip In Maryland
• Do You Need A License To Flip Houses In Maryland?
• How To Flip A House In Maryland With No Money
• Best Cities To Flip Houses In Maryland

*Before we begin our guide, we also invite you to view our video on How To FLIP A HOUSE For Beginners (Step-by-Step). Host and CEO of Real Estate Skills, Alex Martinez, & Stan Gendlin share how to flip a house in Maryland as a beginner! 

Together, Alex & Stan have completed over 1,000+ house flips. What you learn in this video will give you the confidence and guidance to successfully complete your fix-and-flip project!

What Is Flipping Houses?

Flipping houses involves buying and reselling the investment property for profit, but it's a little more involved than that. For starters, home flippers typically try to acquire deals below market value, leaving more room for profits on the backend. In doing so, house flippers will target distressed homes needing repair so that they may pay less than they are worth.

Next, home flippers will rehab and fix the subject property. Renovations are intended to increase the home’s value, but the cost of labor and materials can’t go over budget. As a result, the upgrades are exact and deliberate. Done correctly, renovations will restore the house to its original glory and allow the investor to resell it for more than they have invested. 

Maryland House Flipping Statistics

Some of the best house-flipping statistics today’s investors need to keep in mind include: 

• Average Home Value: $392,364 
• 1-Year Appreciation Rate: 2.6% 
• Median Days To Pending Sale: 7
• Units Sold: 5,456
• Active Listings: 7,482
• Months Of Inventory: 1.2
• New Listings: 6,508
• Foreclosure Rate: One in every 2,283 households 
• Population: 6,164,660
• Median Household Income: $91,431
• Unemployment Rate: 2.7%

*All Maryland housing market statistics are as of Q2 2023.

Ready to begin your house-flipping career in Maryland? Join Alex Martinez at his FREE training to learn how to get started with house-flipping and wholesaling!

How To Flip Houses In Maryland (7 Steps)

Flipping a house in Maryland is as simple as following these seven steps:

1. Find A House-Flipping Mentor
2. Research The Local Housing Market
3. Find & Analyze Distressed Properties
4. Raise Capital To Fund The Deal
5. Close On The House
6. Renovate The Property
7. Resell The House

Find A House-Flipping Mentor

While rehabbing can be lucrative, it’s not without risk. Therefore, investors may be better off finding a house-flipping mentor than learning to do everything alone. With a great mentor, investors may receive the support and guidance needed to start on the right foot.

Education is crucial, and a mentor can significantly accelerate progress. However, instead of working with anyone, carefully vet potential mentors in Maryland, seeking someone whose style aligns with your goals and values. Doing so will optimize efficiency, mitigate risk, and make the process much more enjoyable, which is more than any new investor can ask for.

Research The Local Housing Market

For the most reliable information about the Maryland real estate market, consult the following sources:

• Zillow Housing Data Research
• Zillow’s Maryland Market Overview
• Redfin’s Maryland Housing Market Overview
• ATTOM’s Maryland Real Estate & Property Data
• Maryland Association Of Realtors Monthly Market Data
• Realtor.com Maryland Housing Market Data
• SoFi’s State Foreclosure Data
• U.S. Census Bureaus’ Maryland Data
• Bureau Of Labor Statistics’ Maryland Economic Data

Find & Analyze Distressed Properties

Finding and analyzing distressed properties in Maryland is much more approachable when investors implement the 70% rule. While not entirely accurate, the 70% rule gives investors an idea of how much they should spend on a deal.

To exercise the 70% rule, compare the subject property to nearby real estate comps to determine its after-repair value (ARV). As its name suggests, the ARV is how much the home will be worth once it is renovated. Next, multiply the ARV by 70% (or 0.70) and subtract the estimated rehab costs to calculate the maximum allowable offer (MAO). The MAO is how much you can spend on a deal while leaving enough room to make the profits worthwhile.

The 70% rule isn’t perfect and should only complement a more exhaustive analysis, but it is an excellent place to start for new home flippers. 

Raise Capital To Fund The Deal

Most investors aren’t awarded the luxury of funding their deals. Buying a home is too expensive for most people to pay out of their pockets. So, despite popular belief, it’s better to borrow money to flip houses in Maryland. 

Investors have come to rely on two funding sources: hard money and private money. Unlike their traditional counterparts, private and hard money loans coincide with several benefits that work in investors’ favor. Most notably, these flip loans are short-term, asset-based, and quick to realize.

Close On The House

In Maryland, investors must work with an attorney to guide them through the following closing process:

• Investors and homeowners negotiate terms until an agreement is reached, resulting in a written and signed purchase and sale agreement.
• The attorney will conduct a title search to confirm the chain of title and that no discrepancies will present themselves later. 
• Investors may opt for a property inspection or conduct due diligence by walking through the home to confirm its condition.
• The buyer’s agent or attorney will help prepare, review, and sign the necessary paperwork.
• Attorneys are responsible for gathering documents, handling fund collection and distribution, and ensuring accurate paperwork.
• Once the necessary exchanges are made, and the deal is closed, the attorney will record the new chain of title with the local Recorder’s Office.

Renovate The Property 

To flip a home, investors aim to make cost-effective renovations that add value to the property. They strive to make the property slightly better than neighboring homes to boost demand. Done correctly, investors will have the best house on the market (by a narrow margin) that attracts the most attention—all without spending too much money.  

Making calculated renovations requires the highest return on investment. According to Remodeling Magazine, the upgrades with the best returns in Maryland, and the entire South Atlantic region, are:

• Manufactured Stone Veneer: Adding manufactured stone veneers will recoup about 108.9% of the original cost.
• Garage Door Replacement: Replacing a garage door will recoup about 99.1% of the original cost.
• Vinyl Siding Replacement: Replacing siding with vinyl siding will recoup about 98.5% of the original cost.
• Fiber-Cement Siding Replacement: Replacing siding with fiber cement will recoup about 96.1% of the original cost.
• Electric HVAC Conversion: An electrical HVAC conversion will recoup about 86.7% of the original cost.    

Resell The House

The goal is to resell the home as fast as possible, as additional holding costs (like property taxes, insurance, and utilities) pile up daily and hurt profit margins. Most investors will start marketing the property before renovations are completed; that way, they can move forward as soon as possible.

In addition to marketing, consider enlisting the services of real estate professionals. While an agent will cost a percentage of the sale price, their services can return more profits to investors than their cost. Consider an agent as a good investment in your deal; they will require a little capital up front, but their help can result in a higher purchase price in a  shorter amount of time.  

Read Also: How To Invest In Real Estate: The Ultimate Guide

How To Find Houses To Flip In Maryland

The median home value in Maryland has increased by nearly 25.0% over the last three years, but that doesn’t mean it’s impossible to find houses to flip. There are still plenty of places to find potential deals, including:  

• Real Estate Agents: Networking with real estate agents to gain insight into both on- and off-market homes for sale.
• The MLS: Every home on the Multiple Listing Service (MLS) represents an opportunity for an investor to acquire their next deal.

• Foreclosure Auctions: Banks with repossessed inventory may be willing to part ways with non-performing assets at a discounted home price.

• Public Records: Foreclosures and distressed homeowners are public records, so visiting the local Recorder’s Office may reveal motivated sellers. 
• Direct Mail Campaigns: Direct mail campaigns target specific audiences to identify motivated sellers in a given area. 
• Locating Distressed Homes: Identifying distressed properties or neglected homes in a neighborhood may reveal owners who are more than willing to sell.

Do You Need A License To Flip Houses In Maryland?

There’s no need to become a licensed real estate agent to flip houses in Maryland. The luxury of home flipping is awarded to anyone who has already learned how to flip houses in Maryland. However, there’s no reason home flippers in Maryland can’t get their real estate license.  

With a license, investors will gain several benefits, including access to a massive network of like-minded professionals and the MLS. The benefits are significant for those who know how to utilize them but come at a cost. Licensed professionals must pay annual fees and keep up with industry standards, which means passing tests regularly.

Anyone who wants to become a licensed real estate agent in Maryland must complete at least 60 hours of pre-licensing classes and pass the Maryland real estate exam. On top of that, aspiring agents must work with a licensed broker to resell real estate. If that sounds like something you may be interested in, you should consider applying for a Maryland real estate license with the Maryland Department of Labor, Licensing and Regulation.    

Read Also: Real Estate Comps: The (ULTIMATE) Guide

How To Flip A House In Maryland With No Money

Flipping homes in Maryland does not require investors to use their savings to make a down payment. Instead, investors are advised to use other people’s money. In particular, investors of every level can benefit greatly from working with hard money and private money lenders.

Hard money lenders are specialized private companies that provide asset-based loans. Unlike traditional banks that require borrowers to jump through countless bureaucratic hoops and have a high enough credit score, hard money lenders must be convinced that their money is in good hands. In doing so, investors must present an attractive deal and prove their ability to execute it. 

On the other hand, private money loans offer the same terms and require the same asset-based prerequisites as their hard money counterparts but aren’t affiliated with private companies. That means private money can come from anyone with cash who is willing to invest it.

Both hard money loans and private money loans have high-interest rates (much higher than traditional loans), but the cost is worth the price of admission. Most notably, these flip loans offer quick access to short-term funds, which can make or break a deal. They are, without a doubt, the best way to flip houses in Maryland with no money coming out of your bank account. 

If you're aiming to break into the real estate market without a significant financial foundation, I recommend you watch our video on "How To Get Into Real Estate With NO MONEY!", which outlines strategies and insights on navigating the real estate world without hefty bank account withdrawals.

For those who haven’t learned how to flip houses in Maryland, there’s another way to flip deals without spending any of your own money: wholesaling real estate. It involves obtaining legal rights to buy a property and selling those rights to an end buyer for a fee. Wholesaling is a great way to break into the Maryland real estate investing industry, as it is generally less capital-intensive and exposes investors to less risk. 

Let Real Estate Skills jumpstart your career in the Maryland real estate market! Join Alex Martinez at his FREE training to learn how to get started with house-flipping and wholesaling.

Best Cities To Flip Houses In Maryland

The best cities to flip houses in Maryland include, but are not limited to: 

• Baltimore: As the largest city in Maryland, Baltimore offers home flippers the most opportunities to secure deals. Baltimore’s median home value is less than half the state’s, so investors have plenty of opportunities to acquire affordable deals.

• Columbia: Located between Baltimore and Washington, D.C., Columbia’s strong job market and desirable neighborhoods have promoted healthy housing activity. In particular, however, the city offers a very stable rental market. As a result, patient investors may realize significant gains for years to come.

• Annapolis: Within proximity of Washington, D.C., Annapolis has a booming tourism industry. And while median home values are well above the state average, high-end flippers find that the influx of tourists bodes well for occupancy rates in vacation rentals and waterfront properties. 

Final Thoughts On Flipping Homes In Maryland 

Learning how to flip houses in Maryland—let alone rehabbing properties—is as potentially lucrative as it is complex. Everything from finding and securing deals to renovating properties can be overwhelming. However, with the help of a mentor and a mind for due diligence, even beginners can navigate today’s home-flipping industry with an inherent degree of success.

At Real Estate Skills, our team of experts is ready to guide you on your Maryland house-flipping journey. We're committed to providing the knowledge, resources, and support you need to navigate the intricacies of the Maryland real estate market successfully. Avoid common mistakes and maximize your returns by leveraging our wealth of expertise.

Let RealEstateSkills.com be your trusted partner in turning your Maryland house-flipping goals into profitable realities. Get started with us today.