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

Flipping houses as a real estate investment strategy has the potential to be quite lucrative. The key to success is putting a proven process in place for flipping houses. According to ATTOM, the number of homes flipped by investors in 2022 represented about 8.4 percent of all home sales, the largest percentage since at least 2005.

Although known for its vast acres of farmland, Indiana is the 17th most populous state in the nation, with a lot of potential for flipping houses. Read on to learn how to flip houses in Indiana with our ultimate step-by-step guide.

• What Is Flipping Houses?
• House Flipping Statistics
• How To Flip Houses In Indiana (7 Steps)
• How To Find Houses To Flip In Indiana
• Do You Need A Real Estate License To Flip Houses In Indiana?
• How To Start Flipping Houses In Indiana With No Money
• Best Cities To Flip Houses In Indiana
• Final Thoughts On Flipping Homes In Indiana

*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 Indiana 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 is a short-term real estate investment strategy where the investor purchases a home, renovates it to add value, and then sells it for a profit. The investor purchases the home at below market value, either because of the property’s condition or because the seller is highly motivated. The purchase price is critical to ensure the best profit margin.

Identifying the best house for flipping is part art, part science. The sale price minus the cost of the renovation equals the investor’s net profit. It’s critical to perform due diligence in finding distressed, outdated, and undervalued homes that hold the most potential for profit after rehab.

In addition to renovation costs, getting the home back on the market quickly will help minimize holding costs and maximize profits.

Next, we’ll take a look at some statistics on flipping and the housing market in Indiana.

Read Also: Motivated Sellers: How To Find And Negotiate With Them

Indiana House Flipping Statistics

The big story for the Indiana housing market, and in many markets across the country, is the lack of inventory. Higher mortgage rates have also meant fewer buyers entering the market. Despite some challenges, Indiana’s housing sector got off to a better start in 2023 than anticipated.

While the pace of closed sales dropped off as March turned to April, the number of pending sales continued to rise, according to the Indiana Association of Realtors. Inventory is not as tight as in 2021 or 2022. It also notes that pending sales, median property prices, and days-on-market all point to a housing market that’s heating up despite mortgage rates.

According to the latest data from SoFi, Indiana has the 9th highest foreclosure rate in the nation, at one in every 3,546 homes, offering ample opportunity for home flippers.

This compares to the national average for foreclosure of one in every 4,234 housing units. Three states in the top 10—Illinois, Ohio, and Indiana—are responsible for the Great Lakes region tying for the largest presence among the top 10 states ranked by highest foreclosure rates.

The Indiana housing market, like many others, presents various challenges but also significant opportunities, particularly for those interested in property flipping.

With foreclosure rates higher than the national average, the prospects for finding potential investment properties are plentiful. However, successfully navigating the real estate market requires more than just opportunity - it needs sound knowledge and strategic skills. Ready to boost your real estate investing abilities?

Attend our FREE training at Real Estate Skills. Gain insider knowledge, expert strategies, and essential skills to make the most of every real estate opportunity that comes your way.

How To Flip Houses In Indiana (7 Steps)

Learning how to flip houses in Indiana can be made easier with some planning. Following this seven-step process has proven successful for other investors and can be your key to success as well.

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

1. Find A House Flipping Mentor

Thanks to the popularity of reality television shows, many would-be investors are led to believe that making money by flipping houses is easy. But the truth is that flipping houses takes a combination of knowledge and favorable market conditions to be truly successful.

If this is your first time flipping houses, you can improve your opportunities for success by investing upfront in an experienced mentor. Whether you have to pay your mentor a fee or a share of the profits, it will be money well spent. Inexperienced house flippers who don’t seek the help of a mentor are at greater risk of spending too much on the purchase of a fixer-upper or the renovation—or simply choosing a home with poor resale value—to realize a profit.

There are a number of ways to find a mentor for flipping houses. You can attend in-person real estate auctions which are frequented by property investors, including those who are highly experienced in flipping houses.

Ready to start house-flipping in Indiana? Join Alex Martinez at his FREE training to learn how to get started with house-flipping and wholesaling!

2. Research The Indiana Housing Market

Before you start flipping homes in Indiana, it pays to have a thorough understanding of the market. If you’re new to the Indiana real estate market, you’ll want to take advantage of several resources before diving into house flipping.

The Indiana Association of Realtors is the state-level Realtors association for the Hoosier State and provides monthly housing data, including pricing and inventory data.

In addition to the State Realtors Association, there are 23 local residential Realtor associations with multiple listing services (MLS) in Indiana. These local boards are part of eight local multiple listing services (MLS):

• East Central Indiana Board of Realtors MLS
• MIBOR Realtor Association Broker Listing Cooperative
• Greater Northwest Indiana Association of Realtors
• Richmond Listing Management Service
• Terre Haute Area Association of Realtors
• Indiana Regional MLS
• Southeastern Indiana Board of Realtors
• Southern Indiana Realtors Association, Inc.

Other housing market resources include:

• Redfin’s Indiana Housing Market Overview - Investors will find everything from historical price trends to migration patterns in Redfin’s state-level market overview.
• Zillow’s Housing Data Research - Zillow’s data research provides historical insight into home inventory, values, sales prices, rental indices, and more.
• RealtyTrac’s Indiana Foreclosure Data - RealtyTrac provides foreclosure data on a state-level basis.
• Indiana Department Of Workforce Development - This department houses Indiana’s unemployment services. Understanding an area’s unemployment rate can give some insight into housing activity for an area.
• Professional Licensing Agency handles real estate licensing while laws pertaining to the practice of real estate and the authority of the Real Estate Commission can be found in Indiana Code Title 25. Property law can be found in Title 32. For information regarding real estate contracts and transactions, refer to Indiana Code Title 24.

3. Find And Analyze Distressed Properties In Indiana

There are a number of ways to find distressed properties. While some property investors find success by driving through neighborhoods looking for distressed properties, other methods for finding potential homes to flip include researching public records, using direct mail campaigns, or attending foreclosure auctions.

Once you’ve identified a potential investment property, you’ll need to see if the numbers work before going under contract. The first calculation to consider is the After-Repair Value, or ARV, which is calculated by adding the property’s current value to the value added by the renovations. You can also check your estimated ARV by reviewing comps.

If you have experience in home renovation, you may be able to estimate rehab costs on your own. But if not, you should hire a contractor to inspect the distressed property you’re considering and provide you with a list of needed repairs, along with cost estimates. It’s best to get estimates from multiple contractors.

Consider also getting the help of a software platform like Rehab Valuator to help you analyze potential deals as well as help you market your renovated property.

When estimating profits to determine what you can afford to pay for a property, you’ll need to subtract your holding costs from what you hope to pocket. Your holding costs will vary from property to property, and may include things like finance charges, insurance, utilities, and even property taxes.

After you’ve calculated the ARV and estimated rehab costs, you’ll be able to figure out the Maximum Allowable Offer (MAO) for the property. The MAO begins with the ARV. Next subtract your fixed costs, rehab costs and your desired profit. The resulting number is the maximum you should offer, or MAO, for the property.

Here is the formula:

ARV - Fixed Cost - Rehab Costs - Desired Profit = Maximum Allowable Offer (MAO)

What is the 70% Rule for House Flipping?

Another useful tool for determining your MAO is using the 70% rule in house flipping. This rule states that you shouldn’t pay more for a property than 70% of its ARV or after-repair value.

Once you have the ARV, multiply it by .70 (or 70%) and subtract the amount you budget for repairs. The result is an estimate of the maximum allowable offer (MAO), the most you should spend on a property and still turn a decent profit.

Keep in mind, there’s a lot the 70% rule doesn’t consider. For that reason, don’t let it take the place of an in-depth analysis, but rather treat it as a “rule of thumb” estimate.

4. Raise Capital To Fund The Deal

Even if you’re able to finance your original purchase, growing your business is likely going to require outside capital to fund your ongoing deals.

One of the most common methods of financing real estate investments is with hard money. A hard money lender provides private funds to other investors for buying real estate. Although borrowers won’t have to meet the regulatory requirements of a conventional loan, they should ask about fees and other terms and conditions.

Because these loans are considered short-term, the cost of financing is often high to incentivize the borrower to pay the loan back quickly in the case of a flip or refinance if a property is held for rental. In the case of flipping houses, the loan would be paid when the renovated home is sold. It is one of the carry costs that should be included when analyzing a potential deal.

Similar to a hard money loan is a private money loan. As with hard money loans, a private money loan won’t require a strict approval process or a significant down payment. However, they are also likely to have a high-interest rate and fees.

Besides private and hard money loans, some flippers finance their projects by forming joint venture partnerships or through other alternative financings.

5. Close On The House

Once you’ve raised adequate capital, you’re ready to close on the property.

While some states require an attorney’s involvement in real estate contracts, Indiana does not, although you may want to consider having an attorney involved. While the process can differ somewhat from property to property, here are the typical steps to close on your investment:

• Sign the Contract: Once you’ve identified a property and successfully negotiated the terms of the sale with the homeowner, you will both sign a real estate purchase agreement. Do your due diligence before signing.
• Proof of funds: The seller will want to ensure you are able to go through with the deal, so you’ll likely be asked to pay 1-2% upfront and provide a proof of funds letter signed by a bank official for the remainder. If you’re using a hard or private money loan, provide documentation to show the money will be available by closing.
• Title Search: A title company will conduct a title search to determine if there are any liens against the property, ensure the property lines are drawn correctly, and issue title insurance. The title company also makes sure ownership officially transfers.
• Escrow: An escrow company manages the closing documents, arranges the funds' transfer, and completes the legal paperwork used to record the sale.
• Property Inspection: As a buyer, it’s a good idea to have the property inspected even when buying “as is,” to ensure there are no violations to the contract that need to be resolved.
• Closing: While cash buyers will have fewer closing costs than buyers getting a mortgage, investors should still expect to cover their share of any attorney, courier, title search or escrow fees, as well as prorated homeowners insurance and property tax. Once all documents are signed and fees paid, the buyer provides payment for the purchase and the buyer hands over the keys.
• Recordation: The closing documents are sent to the county’s recording office and become the new official title on record.

6. Renovate The Property

When it comes to flipping homes, time is money. Ideally, you’ll have your contractors lined up before you’ve even taken possession. Be sure you have a written contract in place for the work, including renovation costs, payment schedule, timeline, and penalties for missing deadlines.

The agreement should also spell out what happens when an unforeseen issue arises impacting the budget, which is not uncommon with renovating any property, but especially a distressed one. Meet with your contractor regularly and verify work has been satisfactorily completed at each stage.

Renovation should make the home stand out in the neighborhood without resulting in a value too high for the neighborhood, making it difficult to find a buyer.

Prioritize improvements that offer the greatest return on investment. The following renovations and their return on investment were cited by Remodeling Magazine as the top seven offering the greatest return on investment in the region around the Great Lakes, including Indiana:

• Manufactured Stone Veneer:6%
• HVAC Conversion to Electric:7%
• Garage Door Replacement:4%
• Midrange Kitchen Remodel:3%
• Vinyl Siding Replacement:1%
• Fiber/Cement Siding Replacement: 67%
• Midrange Bath Remodel:2%

While costs can vary, these benchmarks are a good indication of renovations most likely to provide a good return on your dollar.

7. Resell The House

In most cases, the buyer pool for your renovated property will be owner-occupants. Less typically, buyers would be other investors buying the property for a rental.

Your goal should be to sell the property at the highest price within the least number of days on the market, maximizing your profits. The faster you move the house, the lower your holding costs on everything from property taxes to utilities.

Hiring a real estate agent and a stager is an upfront investment that usually pays off by reducing time on the market and fetching the maximum price.

A survey conducted by the National Association of Realtors found that home staging decreased a property’s time on the market.

Real estate agents know the local market and may even be working with buyers who would be interested in the renovated property. These professionals are also excellent sources for pricing, alerting you to new competition, and marketing the property through the MLS.

Indeed, real estate agents can offer invaluable insights and resources when it comes to understanding the local market and attracting potential buyers. But what about the paperwork involved in these transactions? Don't let legal jargon and complex documentation deter you from your wholesale real estate journey.

How To Find Houses To Flip In Indiana

The first step toward success with flipping houses is to identify distressed properties to flip. While it’s possible to find potential flip properties by driving around neighborhoods, it’s better to implement a few additional strategies if you want to consistently maintain a pool of potential properties to buy.

• Attend Foreclosure Auctions: It’s not unusual for banks to auction off foreclosed properties in an attempt to recoup some of their losses. Properties are generally sold below market value, offering a good opportunity for flipping.
• Search Public Records: Foreclosures are public records. Visit the county recorder’s office to find homeowner contact information for the most recent properties that have fallen under distress.
• Local MLS: There’s a local MLS for every geographical area of Indiana. Gaining access, either directly or through an agent, will allow you to identify foreclosures and other distressed properties.
• Direct Mail Campaigns: Once you’ve gathered a list of homeowners with distressed properties, send physical mail to each address and let them know you want to buy and can close quickly. While responses will vary, all it takes is one closed property to recoup your costs.
• Network: Find ways to network with real estate professionals in the community or join real estate investment groups on social media.
• Identify Distressed Houses: Overgrown lawns and disrepair are signs that a homeowner may no longer be interested in the property or may not have the means to maintain the home. If you notice a home has been neglected for a period of time, the homeowner may be motivated to sell.

Check out our in-depth video on "How to Gain Access to the MLS Without a License." We cover key insights and practical tips to unlock potential property opportunities you might have been missing out on!

Read Also: What Is Driving For Dollars? The 5 Best Real Estate Apps In 2023

Do You Need A Real Estate License To Flip Houses In Indiana?

While there are activities that require a real estate license in Indiana, flipping houses isn't one of them. You are prohibited, however, from acting in the capacity of a real estate agent or broker unless you're licensed. Keep in mind, Indiana law also requires sellers to disclose what they know about a home's condition.

While you don’t need a license to flip homes in Indiana, holding one will include full access to the MLS. If you become licensed, your status as an agent should be disclosed on any offer to purchase.

Read Also: How To Get MLS Access: The (Ultimate) Guide

How To Start Flipping Houses In Indiana With No Money

One of the reasons flipping houses appeals to so many is that it doesn’t require a lot of personal cash upfront to be successful. In fact, it’s possible to start flipping houses in Indiana without any money.

One of the most common ways is to get a short-term loan through a non-institutional lender, such as a private money lender or a hard money lender.

These lenders are typically wealthy individuals or companies that make loans to borrowers investing in real estate. Financing from hard money lenders uses real property as collateral, considered a “hard” asset. Both types of lenders work frequently with house flippers, developers, and others investing in residential and commercial properties.

As mentioned previously, these loans are easier to obtain but often come at a price that makes them best suited for short-term investments like flips.

Some investors have found success with crowdfunding, which differs from more traditional forms of financing because it’s all done online with crowd-funding platforms, supported by social media.

Some investors have participated in real estate investment clubs to finance their flips while others have found success taking on a silent partner willing to finance the deals in exchange for the flipper’s ability to provide labor.

Wholesaling offers another option. Wholesaling assigns the purchase contract to another investor before closing, and therefore, doesn’t require cash. Because it doesn’t involve a purchase and resale, wholesaling isn’t flipping. But it does contain some of the same elements.

Best Cities To Flip Houses In Indiana

It should come as no surprise that Indiana’s most populous cities also hold the most promise when it comes to flipping houses. Indianapolis and Fort Wayne, followed by Evansville, South Bend, and Carmel are thought to be some of the best metros for home flipping in Indiana.

Let’s take a closer look at Indiana’s three most populated metros:

• Indianapolis is Hoosier State’s largest city, with a 2023 population of 871,449. Indiana’s capital city ranks as the 16th most populous city in the U.S. In 2021, the Indianapolis-Carmel-Anderson metro area had a combined population of over 2.1M people. According to Realtor.com, the median sold home price is $254,400. With 1,483 homes that are either in foreclosure auction, pre-foreclosure or bank-owned, investors shouldn’t have difficulty finding a distressed property.
• Fort Wayne ranks as the 82nd most populous city in the nation, with 269,621 residents. Located in northeastern Indiana, Fort Wayne holds nearly as much opportunity for flipping, with nearly 300 homes listed as active foreclosure auction, bank-owned, or pre-foreclosure. The median home value for all homes sold in Fort Wayne is $236,000 in April 2023, according to Realtor.com. Homes are staying on the market for about 12 days on average and sell about 7.49% above the list price, making it attractive when it comes time to put a flip back on the market.
• Indiana’s third most populous city is Evansville. In April 2023, the median sold home price is $184,600, according to Realtor.com, with homes on the market for about 13 days on average. Evansville is known for its affordable multi-family and two-bedroom homes, making it a good choice for home flippers.

Final Thoughts On Flipping Homes In Indiana

Learning how to flip houses in Indiana can be the start of a significant income. But to be successful, Indiana real estate investors—and investors everywhere—should follow a proven step-by-step process for maximizing profits.

If you're planning to flip homes in Indiana, be sure to do your research and due diligence before making an investment. Engage the help of a mentor for your first few deals to address any challenges and improve your opportunities for success.

At Real Estate Skills, our team of experts is ready to provide you with the tools you need for flipping houses in Indiana. We're committed to providing the knowledge, resources, and support you need to successfully navigate an Indiana property flip. So avoid common mistakes and maximize your returns by leveraging our expertise.

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