Source properties
ANALYZE
Run the numbers
ACQUIRE
Secure financing
RENOVATE
Manage construction
MARKET
Showcase value
SELL
Capture profit
Successful flipping depends on buying correctly, controlling costs, managing the renovation, and having a realistic exit strategy. Each phase requires rigorous analysis to ensure the project remains profitable from purchase to final exit.
Flipping at a Glance
FIND
The Flip Equation
PURCHASE PRICE
+ CLOSING COSTS
+ RENOVATION COSTS
+ HOLDING COSTS
+ SELLING COSTS
= TOTAL PROJECT COST
ARV / SALE PRICE
− TOTAL PROJECT COST
= ESTIMATED PROFIT
Every number is an estimate until verified through due diligence, contractor bids, market data, financing terms, and actual transaction costs.
What You Need to Analyze
Purchase Price
The foundation of your profit. You must buy at a price that accounts for all costs and leaves room for your target return. Never overpay based on hope.
After Repair Value (ARV)
The estimated value once renovated. Rely on solid comparable sales data, not just listings, to determine what the market will actually pay.
Renovation Budget
A detailed scope of work. Include a contingency for hidden issues. Accurate estimates from reliable contractors are non-negotiable for success.
Holding Costs
The cost of time. Taxes, insurance, and utilities continue every month you own the property. Speed is profit; delays are expensive.
Financing Costs
Interest, points, and loan fees. Leverage helps you scale but carries significant weight. Know your monthly payment and total debt service upfront.
Exit Strategy
Always have a Plan B. If the market shifts and you can't sell for your target ARV, can you rent the property or refine the sales approach?
Flipping Process
A structured timeline for navigating a real estate flip from initial search to final exit.
01
Find the Property
Source potential deals through wholesalers, agents, off-market marketing, or auctions that meet your investment criteria.
02
Analyze the Deal
Run the numbers to determine ARV, estimated repair costs, and potential profit to ensure the project meets your minimum return requirements.
03
Conduct Due Diligence
Perform inspections, confirm contractor bids, verify zoning, and check title history to uncover any hidden risks before committing capital.
04
Secure Financing
Obtain high-leverage financing through hard money, private lenders, or conventional methods based on the project's exit strategy.
05
Close
Execute final contracts, wire funds, and finalize title transfer to officially take possession and start the renovation timeline.
06
Renovate
Manage your contractors and budget tightly to execute the repair scope efficiently while maintaining quality for the final buyer.
07
Prepare for Market
Finalize punch-list items, professional staging, and high-quality photography to maximize the property's appeal to prospective buyers.
08
Sell
List the property, review offers, and close the sale to realize your projected profit and recycle capital into the next deal.
BEFORE YOU BUY, RUN THE NUMBERS.
Investors should evaluate: comparable sales, ARV, repair scope, contractor estimates, financing, taxes and insurance, utilities, holding period, realtor commissions and closing costs, contingency reserves, and expected resale price.
EXAMPLE ONLY
Purchase Price
Renovation Budget
Holding & Closing Costs
Total Project Cost
$250,000
$65,000
$22,000
$337,000
After Repair Value (ARV)
$450,000
Projected Profit
$113,000
THE PART PEOPLE SKIP.
Renovation Overruns
Material cost spikes and undiscovered defects frequently push expenses beyond projections.
Project Delays
Delays in permitting, supply chains, or labor extend timelines and increase carrying costs.
Structural Failures
Unforeseen foundation or roofing systemic defects discovered post-acquisition require immediate capital.
Market Dynamics
Broader economic shifts or interest rate updates during construction can depress final sales performance.
Financing Expenses
Costs from short-term loans compound continuously for every additional week the property is active.
Flawed ARV Metrics
Reliance on inaccurate comparable sales results in overestimating values, breaking project models.
Carrying Costs
Insurance, taxes, and utility fees consume cash buffers for the entire duration of the project.
Vendor Instability
Substandard craftsmanship or timeline disputes with active contractors disrupt operational plans.
Selling Below Projections
Stagnant demand or localized saturation might force downstream transaction concessions and lower yields.
FLIPPING 101
A practical introduction to the numbers, process, and decisions behind a real estate flip.
- ● What flipping is
- ● How to evaluate a potential deal
- ● Understanding ARV
- ● Estimating renovation costs
- ● Calculating potential profit
- ● Understanding holding and selling costs
- ● Common mistakes
- ● Basic exit strategies
$19.99
Real Estate With Her | Analytical Education Series