After buying a $150,000 fixer-upper in Des Moines, IA, in the spring of 2023, real estate investor Jacob Naig made the dubious decision to take his work home with him: by moving into his flip.

For two years, Naig worked, ate, showered, and slept in his own unfolding construction zone. His wife, business partner, and designer, Danielle, lived in a second flip next door, while their 6-year-old daughter, Natalie, popped back and forth.

“My daughter and I lived in the basement for two months, as the upstairs of our home was gutted naked,” Naig recalls. “In our makeshift bedroom in the basement with no windows, we were tested to the outer limits of our sanity during the Iowa winter. We even turned the attic into a temporary bedroom at the last minute, which made things more complicated but spared us hotel nights.”

They had good reason to tough it out.

“It was a financial choice: Living there meant we would be sitting pretty on the $500,000 tax-free capital gains exclusion on a primary residence,” Naig explains. “It also lowered holding costs dramatically—no more supplementary rents or mortgage payments on a second residence during renovations—and put us at the scene early enough to catch crucial problems, such as water damage during storms.”

In the end, Naig’s decision to camp out in his renovation paid off.

“In 2025, we listed for $285,000 and took $280,000 after one weekend of showings, pocketing about $70,000 in profit, all of which was eligible for the primary residence exclusion,” Naig says. “The project’s success was entirely based on the fact that we were living on site. The drawback is the practical life disruption: You move into a dump, endure noise and dust, only to have the bittersweet experience of leaving just as the space hits perfection.”

A wild way to save on flips

Although living in a flip may sound about as soothing as camping in a construction zone, the potential savings are tough to ignore. Between stubbornly high home prices, steep mortgage rates, ballooning construction costs, and slimming margins, house-flipping activity and profits have been dwindling for years. Live-in flips keep the lights on and the ROI in positive territory.

“It kept costs tight and allowed me to manage the entire process without delays,” says investor Mark Sanchez, who moved into a flip he purchased in Port Richey, FL, for $185,000. Although he endured “showering with drywall dust in the air, eating around power tools, and dealing with constant noise,” he didn’t mind one bit once he sold for $297,000, netting $70,000 in tax-free profits.

The most significant advantage of turning your flip into your primary residence is the capital gains tax exemption ($250,000 for individuals and $500,000 for married couples, provided you live there for two years). Another perk is more favorable home loans. Naig secured an FHA 203(k) loan, which wraps purchase and rehab costs into one mortgage for primary residences; it helped keep interest rates below the traditional bridge loan he would have gotten otherwise.

Another benefit? “You know every nail and fixture by name, and you control the quality,” says Todd Stephenson, who cooked on a camping stove while living in his flip in Chattanooga, TN, for two years. Although he found living in a construction zone a “grind,” once he sold for $326,000, he admits, “the return made it worth every late night and drywall patch.”

“It’s one of the few strategies where a hands-on, budget-conscious approach can actually outperform more capital-intensive methods, but only if you’re scrappy enough,” explains investor Catherine Mack at House Buyer Network. “Many first-time investors underestimate the hassle of renovating a house while living in it.”

And even once the ordeal is over and you move out, you might actually miss the place, now that you've spent so much time there getting it into shape.

“The hardest part is right at the end,” Stephenson admits. “Just as the house becomes exactly how you want it, you hand over the keys and walk away.”

But when asked if he would do it again, Stephenson replied, “I already am.”

Curious to learn more? Here’s a guide to the pros and cons of live-in flips.

Is a Fed rate cut finally in the cards? After this week’s Consumer Price Index report came in mild with a 2.7% annual rise in prices, most signs point to Federal Reserve Chair Jerome Powell announcing a rate cut at the central bank’s next meeting in September. CME’s FedWatch tool currently puts odds of a rate cut at over 96%. This should help nudge mortgage rates lower and potentially spark the sluggish housing market.

Home sellers take a haircut. Property analytics firm Coality found that over half of all real estate sales in May went for below the asking price, the highest share recorded in five years. Find out if your area’s fetching below or above the asking price.

The rent may not be too damn high anymore. Asking rents in the US have been dropping annually for two years straight, landing in July at $1,712 for zero- to two-bedroom apartments, according to Realtor.com. Check out the median asking rents in the top 50 US metros.

How much a mansion costs: Zillow found that a house over 5,000 square feet will run you around $1.4 million nationally, but it remains under $1 million in four major markets: Buffalo, NY; Indianapolis; Cleveland; and Memphis, TN. A “starter mansion” (in the lowest 25th percentile) will cost around $900,000.

Should your 401(k) include real estate? President Trump signed an executive order to allow retirement plans easier access to alternative assets such as private equity, crypto, and real estate. Here’s more on how this could play out, plus the rewards and risks.

About that Fannie/Freddie IPO… The Trump administration’s recently proposed plans to sell the federal government’s stake in mortgage giants Fannie Mae and Freddie Mac in November has everyone buzzing over what it could mean for the housing market. Some warn this could make mortgages more expensive by $1,800–$2,800 per year. Here’s a quick primer on the pros and cons.

Is your home decor tasteless? Interior designer Bergen Flom kicked off a TikTok storm by asking her fans to name the decor detail that screams “I don’t have taste.” Her pet peeve? Tom Ford coffee-table books. Find out if you’re guilty of any tacky design moves here.

Ever travel to Italy and wish you could stay for good? That’s what inspired Australian expat Nikki Taylor to move to Italy in 2014 and establish Italy Property Consulting to help other foreigners follow in her footsteps. Taylor’s work helping her clients purchase property in Italy has been featured on reality shows, including HGTV’s House Hunters International and Mediterranean Life. Here’s what she’s learned about buying homes in Italy, including her own.

Where do you live in Italy, and what’s it like? “I am based in Puglia, the number one place for tourism and foreign investment in Italy at the moment, and life is very chill and laid back. I have bought two homes in the region: my previous property in Ostuni and my current home in Martina Franca, which I bought in 2023. Valentine’s Day was the day I made the offer, the best romantic gift I could ever give myself and my two little boys. I was walking around my neighborhood and I came across the house. I was so specific about what I wanted for my dream home: a swimming pool, a view of Locorotondo, and a flat garden for my boys. I have done some renovations to the property and still have quite a bit to do to modernize it, but it’s a great blank canvas. It has already gone up considerably in value.”

What’s up with those $1 homes everyone sees for sale in Italy? “The topic of the $1 homes always amuses me, as I really do believe it’s a clever marketing tactic, but also something that is really a terrible investment. The properties are located in areas that are so remote, lack services and amenities, and are not interesting from a tourism perspective. Most of the towns that are offering these homes require that you live there as a main residence, and the restoration needs to be done within a certain time frame. You could easily invest between €50k–€100k [$57,847–$115,694] in restoring these properties, and it would be extremely unlikely to recoup that investment should you need to sell the property down the line.”

Even if the $1 homes are bad investments, are there bargains? “It was off the back of the $1 homes that I launched the very first weekly digital property magazine, La Dolce Vita Lifestyle, where I showcase affordable homes throughout Italy that do not have the restrictions and limitations of the $1 homes, and that are already turnkey and ready to rent out on the tourist market. There are many properties located in excellent areas that are extremely well priced. In high-demand regions such as Tuscany, Puglia, and Sicily—which are the top three regions to invest in from a holiday rental perspective—you can find doer-uppers at excellent prices.”

What advice do you have for others who want to buy a home in Italy, especially an investment property? “Buying a property to use for investment purposes is something that has grown in demand over the last 10 years, given the popularity of Italy for weddings, retreats, wellness, and culinary tours. Someone who buys a property in Italy could not only utilize it for a holiday rental perspective, but also to run retreats and events, which would further enhance their ROI.”

What’s the renovation process like in Italy? “Even if you have the skills to renovate the property, you wouldn’t be able to restore it yourself without the proper building licenses. The permit process depends on which region you invest in and also on how good your contacts are at the local municipality to get a permit approved quickly. In Puglia, it can take up to two years, depending on what you want to do. Flipping in Italy is not really a thing, as the properties do not go up significantly in value, unless you’re buying at an extremely low price in a top area for tourism.”

Need more of la dolce vita? Check out more properties and stories from Taylor here.

YIMBY stands for Yes In My Back Yard, a philosophy advocating for the construction of more housing in order to lower prices. The YIMBY movement was born around 2010 to battle NIMBYs (Not In My Back Yard), who generally oppose new construction over concerns of how it might increase crowds, traffic, crime, pollution—and depress prices of existing properties. Meanwhile, YIMBYs argue that people have to live somewhere, an argument that’s hard to ignore amid the housing shortage and affordability crisis plaguing much of the US today.

YIMBYs have recently scored some big wins. In June, California Governor Gavin Newsom signed two bills that would exempt certain housing projects from the California Environmental Quality Act’s never-ending review process, a victory that prompted Newsom to declare, “Go YIMBYs!” at a press conference. He also signed into law sweeping housing reforms to speed up the permit process and allocated $40 billion toward building 2.5 million new homes in the next six years.

For real estate investors, it’s smart to know whether an area leans NIMBY or YIMBY, since this can impact how much red tape you’ll face.

“My advice to real estate investors is to connect with YIMBY groups,” says Brian Rudderow, a real estate investor at HBR Colorado. “YIMBYs can be your allies at hearings, adding voices of support that help counterbalance NIMBY resistance.”

“I have gotten involved with YIMBY and, by engaging with local pro-housing advocates, I have found projects move quicker and built stronger community ties,” adds commercial real estate investor J. Ryan Smolarz. “YIMBY groups helped turn confrontation into collaboration, resulting in more affordable housing and smoother approvals. My advice is to show up, listen, and team up with YIMBYs, as it truly makes a difference.”