What is fix and flip?
Buy it dated, make it beautiful, sell it retail. Here is how flippers actually make money. And where they lose it.
Fix and flip is the strategy everyone knows from television: buy a distressed property below market value, renovate it, and resell it at full retail. The shows get one thing right. The transformation sells. What they skip is that flips are won or lost before the first wall comes down, in the buying math.
The math that decides everything
- 1
ARV. After Repair Value
What the finished house sells for, proven by comparable sales. Optimistic ARVs are the number one flip killer.
- 2
Rehab budget
Materials, labor, permits. Plus a contingency, because every wall hides a surprise. Experienced flippers pad 10-20%.
- 3
Carrying costs
Loan interest, taxes, insurance, utilities. Every extra month on the timeline eats margin quietly.
- 4
The 70% rule
A common starting point: pay no more than 70% of ARV minus repairs. Not a law. A discipline that keeps you out of thin deals.
Wholesalers and flippers are two halves of the same market: wholesalers find and contract the opportunity, flippers execute the renovation and exit. Understanding the flipper's math makes you a better wholesaler. You know exactly what your buyer can pay and why.
Run it in Dreamteam
Every deal in Dreamteam carries flip analysis. ARV from comps, repair estimates at light/medium/heavy levels, and max allowable offer, calculated in seconds instead of spreadsheet evenings.
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