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

With a median age of just under 39, Missouri’s unique demographics present an exciting opportunity for real estate investors. After all, millennials have been one of the largest demographics of buyers for the better part of a decade, and their continued desire for homeownership creates a favorable environment for those who have learned how to flip houses in Missouri.

As a result, we will explore the ins and outs of flipping homes in Missouri. From identifying target neighborhoods to implementing modern design elements, we'll provide you with the tools you need to tap into this growing market and achieve profitable returns, including the following:

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

*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 Missorui 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?

Already an enticing real estate investing strategy, flipping houses has recently proven it belongs in the pantheon of today’s greatest wealth-building vehicles. As recently as the first quarter of this year, the average flipped home in the U.S. generated a gross profit of $56,000, up 4.7% from the previous quarter, according to ATTOM Data Solutions. The gross profit on the average flip translated to a 22.5% return on investment (ROI), easily exceeding other investment vehicles.

Beyond serving as a tremendous wealth-building opportunity, flipping houses is exactly what it sounds like. Investors will find and acquire homes to rehab and sell for a profit. The key is to improve profit margins around every corner, so investors will prioritize buying distressed homes below market value and restoring them to an acceptable condition, only to sell them for more money than they have invested.

To be clear, learning how to flip houses in Missouri is an involved process and requires investors to wear many hats. From finding and analyzing properties to rehabbing and reselling assets, investors must utilize several skill sets and meld them into a single exit strategy. Once each step complements the others, investors will find flipping houses is a great way to build wealth.

Missouri House Flipping Statistics

To thrive as a house flipper in Missouri, investors must learn the fundamental indicators shaping the local market trends. Armed with this knowledge, flippers will have an easier time listening to what the market has to say and making the appropriate corresponding moves:

• Average Home Price: $238,445
• Median Sale Price: $255,400
• 1-Year Appreciation Rate: +5.2%
• Median Days On Market: 19
• Median Days To Pending: 6
• Homes For Sale: 19,314
• Homes Sold Above List Price:8%
• New Listings: 8,212
• Months Of Supply: 1
• Foreclosure Rate: One in every 6,309 homes
• Population: 6,177,957
• Median Household Income: $61,043
• Unemployment Rate: 5%

*All Missouri housing market statistics are as of the third quarter of 2023.

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How To Flip Houses In Missouri (7 Steps)

To flip houses in Missouri, inventors should follow 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

1. Find A House-Flipping Mentor

When house flipping in Missouri, beginners can significantly benefit from the guidance and support of a seasoned mentor. Partnering with a mentor brings a wealth of advantages, including access to real-world insights, valuable strategies, and a supportive network for growth. The experience and expertise of a mentor provide a unique perspective that can transform obstacles into opportunities in the right environment.

By leveraging the knowledge and experience of a mentor, new investors in Missouri can avoid common pitfalls, make informed decisions, and navigate the complexities of the market with greater confidence. A mentor's guidance will simultaneously sharpen flipping skills, provide insights into local trends and strategies, and offer invaluable advice on various aspects of the business. Ultimately, a mentor can give you the confidence to start and maintain an exciting career in the flipping industry.

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

2. Research The Local Housing Market

The best resources for researching the Missouri real estate market include, but are not limited to, the following:

• Zillow Housing Data Research
• Zillow’s Missouri Market Overview
• Redfin’s Missouri Housing Market Overview
• ATTOM Data Solutions’ Missouri Real Estate & Property Data
• Federal Reserve Bank of St. Louis’ Missouri Data
• SoFi’s State Foreclosure Data
• U.S. Census Bureau’s Missouri Data
• Bureau Of Labor Statistics’ Missouri Economic Data

3. Find & Analyze Distressed Properties

When finding and analyzing distressed properties in Missouri, investors have various strategies at their disposal, but new investors may want to avoid looking past the 70% rule. As its name suggests, the 70% rule prevents investors from spending too much on a potential deal.

First, investors must determine the property's after-repair value (ARV); this is accomplished by analyzing recent sales data of comparable properties in the area or using reliable ARV calculators.

Once the ARV is established, investors can apply the 70% rule. Multiply the ARV by 70% (or 0.70) and subtract the estimated rehab costs. The resulting figure represents the maximum allowable offer (MAO), a crucial guideline to ensure profitable margins.

Here is the formula:

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

It's important to note that while the 70% rule provides a quick snapshot of the deal's potential, it should not be solely relied upon for a comprehensive analysis. Instead, it should be used with other methods for a more thorough evaluation.

4. Raise Capital To Fund The Deal

Investors must raise capital once a deal has been analyzed and proven viable. Instead of seeking traditional long-term financing, however, investors will want to look for shorter-term alternatives. In particular, hard money and private money lenders are excellent sources of capital.

Private and hard money loans are popular choices among house flippers in Missouri. Although they come with higher interest rates than traditional loans, their advantages outweigh the costs. By accepting higher rates, investors gain quick access to funds, giving them a competitive edge in Missouri's real estate market—without jumping through traditional lenders' hoops.

Conducting thorough research, due diligence, and understanding various funding options' terms, conditions, fees, and repayment requirements are essential for investors seeking to raise capital for flipping houses in Missouri.

Exploring alternative financing options such as joint venture partnerships can also be considered, as these partnerships provide opportunities to pool resources and share risks with other investors.

5. Close On The House

Closing on a house in Missouri is similar to closing in every other escrow state. While there are always exceptions, the process will look a lot like this:

• Agreement On Terms: The buyer and seller agree and document the terms in a purchase and sale agreement.
• Escrow Process: Missouri operates as an escrow state, involving a neutral third party, such as an escrow agent or title company. The buyer or their agent sets up an escrow account to facilitate the transaction.
• Buyer's Due Diligence: Potential buyers conduct due diligence to protect their interests; this includes activities like property walkthroughs, title searches, home inspections, appraisals, contingencies, and other necessary steps.
• Document Handling: The escrow agent or title company handles all the required documents, ensuring their completeness and accuracy.
• Document Review & Signing: All parties meet to review and sign the necessary documents, ensuring legal compliance and understanding of the terms.
• Escrow Funds: The buyer places the funds in the escrow account after signing the documents. The funds remain in escrow until all prerequisites are met. Once the escrow terms are fulfilled, the funds are released to the seller, and the buyer receives the keys.
• Title Transfer Documentation: After closing, the local Recorder's Office officially documents the transfer of title, confirming the buyer as the new property owner.

By following these steps, home buyers and sellers can navigate the closing process in Missouri confidently, ensuring a smooth and legally compliant transaction.

6. Renovate The Property

Effective time management and strategic decision-making are vital when renovating an investment property for a successful house flip. To achieve this, prioritize improvements that enhance the property's visual appeal and align with the neighborhood's standards and market demands.

Investors can maximize their potential returns by focusing on cost-effective renovations, enhancing curb appeal, and prioritizing projects with a high return on investment (ROI). According to Remodeling Magazine, the renovations that return the most money to investors at the time of a sale in Missouri (West/North/Central region) are:

• Electric HVAC Conversion: Recoups 93.7% of the original cost
• Vinyl Siding Replacement: Recoups 90.1% of the original cost
• Manufactured Stone Veneer: Recoups 89.8% of the original cost
• Garage Door Replacement: Recoups 83.5% of the original cost
• Minor Midrange Kitchen Remodel: Recoups 77.9% of the original cost

7. Resell The House

Once the final renovation is complete, or even slightly before, it is time for investors to resell the property. Naturally, they should aim to sell the home for a higher purchase price than the total investment.

Investors should consider hiring a Realtor or real estate agent to increase the chances of a more significant payday. Although agents may charge a commission, their expertise and guidance often result in a higher net gain for investors. In many cases, the increased sale price offsets the agent's fees. An experienced agent is likelier to sell the home quickly and at a higher price than an investor working alone.

It is important to remember that investors will only receive a portion of the sale price. After a successful sale, repaying the lender, including any accrued interest, is the priority. Only after fulfilling this obligation can investors consider the final step of the process complete.

How To Find Houses To Flip In Missouri

When searching for properties to flip in Missouri, it is crucial to implement effective strategies to identify potential opportunities consistently. Here are several proven methods to help investors discover distressed properties and maximize their chances of success:

• Collaborate With Local Real Estate Agents: Partnering with knowledgeable local real estate agents can provide valuable insights into both on-market and off-market properties, expanding the options available to investors.
• Utilize the Multiple Listing Service (MLS): Consider obtaining a real estate license or working with a licensed agent who can grant access to the MLS. This comprehensive database of real estate listings offers a wealth of information on distressed properties and can be a valuable resource for finding potential flips.
• Attend Foreclosure Auctions: Foreclosure auctions, organized by financial institutions, offer excellent opportunities to acquire properties below market value. Active investors can participate in these auctions and secure distressed properties that have the potential to generate profitable returns.
• Research Public Records: Visit the local Recorder's Office to access publicly available foreclosure records and identify properties at risk of foreclosure. This research helps investors pinpoint distressed homeowners and properties that may present lucrative flipping opportunities.
• Launch Targeted Marketing Campaigns: Implement targeted direct mail campaigns to reach homeowners in specific areas of interest. Investors increase their chances of finding profitable deals by letting motivated sellers know about their interest in purchasing distressed properties and their ability to close quickly.
• Explore Neglected Properties: Drive around neighborhoods and look for neglected properties. While not always a guarantee, neglected homes often indicate owners who may be more inclined to sell, potentially leading to profitable opportunities for investors.

By combining these strategies, investors learn how to flip houses in Missouri can establish a reliable pipeline of potential deals.

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: Finding Motivated Seller Leads: Free & Paid Tactics

Do You Need A License To Flip Houses In Missouri?

Flipping houses in Missouri does not require obtaining a real estate license. However, there are potential benefits for investors who choose to acquire one. Holding a real estate license grants access to a vast network of industry professionals. Moreover, licensed individuals can directly access the MLS without relying on external assistance.

It is crucial to bear in mind that requirements and regulations can differ among states. In the case of Missouri, a real estate license is not necessary for house flipping. Nevertheless, it is always prudent to consult local laws and regulations to comply with specific licensing requirements.

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

How To Flip A House In Missouri With No Money

Flipping houses in Missouri can be done without relying on personal funds through alternative financing. Private and hard money lenders serve as valuable resources, providing the necessary capital without needing a refinance, traditional bank, credit check, or lengthy approval process. These lenders specialize in short-term financing solutions, ensuring quick cash access and expediting the flipping process.

Another viable strategy in Missouri is wholesaling, which requires no upfront investment like traditional rental properties or flips. Wholesalers secure a property under contract and assign it to cash buyers for a fee, allowing investors to generate income without significant capital expenditure.

To succeed in flipping houses, investors must carefully explore these financing options and select the most suitable approach based on their circumstances and objectives.

You can also check 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.

Best Cities To Flip Houses In Missouri

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

• Kansas City: The Kansas City housing market is characterized by affordable property prices, steady demand, and attractive potential returns on investment. The city's favorable economic conditions, growing population, and vibrant neighborhoods ensure investors will see plenty of demand for the foreseeable future.
• Louis: At $166,804, the median home value in Saint Louis is well below the state average. As a result, St. Louis has seen an increase in demand in the wake of historic appreciation. More people are looking to call St. Louis home because of its affordability, and investors will surely benefit.
• Springfield: Investing in Springfield, MO may be wise, thanks to its robust market that combines affordable housing prices and consistent demand. The city's flourishing economy, thriving business environment, and abundant renovation prospects create plenty of opportunities for prepared investors.

Final Thoughts On Flipping Homes In Missouri

Flipping houses in Missouri presents a lucrative opportunity for investors. More importantly, investors can maximize their chances of success by following the steps outlined above. With careful planning and execution, anyone who learns how to flip houses in Missouri can confidently navigate the real estate market and increase the odds of a profitable outcome.

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