Why Flipping with Little to No Money Is a Risky Way to Start in Real Estate, Especially in San Diego
Every week, I hear from new investors who want to get into real estate by flipping houses. A lot of them have little to no capital, and they see flipping as a quick way to build up funds so they can eventually move into long-term buy-and-hold investments.
At first glance, the logic makes sense:
“If I can just flip one or two properties, I’ll have enough money to buy rentals.”
But after being on both sides, as an investor and as a Realtor working deals here in San Diego and previously in the Midwest, I can tell you,
Flipping is not a beginner-friendly strategy, especially if you're starting with no money.
“But My Lender Will Fund 100% of the Deal…”
Even if a hard money lender says they’ll cover 100% of the acquisition and rehab, you’re still walking a tightrope without a safety net.
Construction doesn’t always go smoothly. In fact, it rarely does. Here’s what I’ve seen firsthand, and what catches new flippers off guard:
Unplanned repairs once you open up walls
Delays in materials or labor
Permit issues if you didn’t pull them up front (common rookie mistake)
Stop-work orders from local municipalities like the City of San Diego or La Mesa
Holding costs piling up while waiting for inspections, bids, or market timing
Hard money lenders aren’t going to bail you out if costs run over, and in flipping, they almost always do.
Flipping Is a Business, Not a Side Hustle
Flipping on TV looks exciting, with demo day, picking finishes, and big checks at the end.
In reality, flipping is a capital-heavy, detail-driven business that requires:
Experience managing contractors
Comfort working with inspectors and city officials
Cash reserves for delays and surprises
Understanding of ARVs, comps, and neighborhood dynamics
Real exit strategies if the property doesn’t sell quickly
If you're brand new and your only plan is “buy it, fix it, sell it fast,” you're setting yourself up for a hard lesson.
A Better Way to Start in San Diego Real Estate
I’m not anti-flipping. I just don’t recommend it as a first step for most people, especially when you’re trying to build wealth with little to no money.
If that’s your situation, here’s what I’d suggest instead:
1. House Hacking
Buy a small multifamily property (2–4 units), live in one unit, and rent the others. With a VA loan (0% down) or FHA loan (3.5% down), it’s one of the best ways to start building equity and cash flow in a high-cost market like San Diego.
2. Partner Strategically
If you find a great deal, bring it to a more experienced investor and partner up. Offer to manage the rehab or the project in exchange for a piece of the upside. You'll gain experience and build relationships, which are far more valuable than your first flip gone wrong.
3. Buy & Hold with the Long View
Real wealth in real estate usually comes from appreciation and leverage over time, not from quick flips. Especially in appreciating markets like San Diego, holding the right property for a few years can be a game-changer.
Final Thought
If you’re just starting out, resist the urge to sprint toward flipping just because it seems like the fastest way to make money.
Yes, people do make money flipping, but a lot of others lose it, or worse, they get stuck with a half-finished project and no way out.
Build smart, learn as you go, and stay in the game long enough to win.
If you're new to real estate and want help figuring out the best entry point for your situation, feel free to reach out. I’m always happy to share what’s worked (and what hasn’t) from my own journey here in San Diego.