Paying Yourself

I have been looking into investing (fixing and flipping) and I am wondering how other investors pay themselves. I want to try to use conventional mortgages to fund my flips and would like to eventually work up to about 6 houses a year. It seems like if I have multiple flips going on that all of my money would be tied up with down payments and holding cost. Do most people just pay themselves a salary or do they take a large sum from the profits of the flip?


I take it your talking about "Fix & Flips"?

It is very difficult to use conventional mortgage financing to do these kinds of deals! First to do conventional financing you will need to put 20% to 25% down on the actual purchase, then you will need job income large enough to qualify for the new mortgage and cover current debt, along with a low debt to income ratio! You will also need to show the lender a 6 to 12 month cash reserve against debt service.

Then when you buy a second property and to do 6 a year I figure you will at some point have 3 to 4 “Fix & Flips” at the same time that requires the same financial qualifications and because none are rented will all rely on your full time income!

Hard money is much easier as there is no qualifiing “Per say” and no need for reserves, debt to income ratio’s or waiting 45 to 60 days to close a conventional escrow! A hard money purchase requires a down payment (Skin in the game!) however you can close in 7 to 10 days and start moving a rehab along quickly!

As for paying yourself I hope your currently working a full time job and intend to stay at that full time job long enough to build a track record and a sizeable reserve. Turn your profits back into your projects whether to do the next property or start building a rental portfolio it makes better sense to reinvest to compound early profits and build reserves!


Well, it all depends on how much money you have available for rent. If you have enough money then you can solve the problem.

you can’t pay yourself a salary. It’s all your money anyway.