[{"data":1,"prerenderedAt":326},["ShallowReactive",2],{"article-how-to-analyze-fix-and-flip-deal":3,"article-surround-how-to-analyze-fix-and-flip-deal":315},{"id":4,"title":5,"author":6,"body":7,"dateModified":287,"description":288,"extension":289,"faqs":290,"headerImage":306,"image":287,"meta":307,"navigation":308,"path":309,"publishedAt":310,"seo":311,"stem":312,"summary":313,"tags":287,"thumbnail":306,"__hash__":314},"articles\u002Farticles\u002Fhow-to-analyze-fix-and-flip-deal.md","How to Analyze a Fix-and-Flip Deal","tim-mushen",{"type":8,"value":9,"toc":274},"minimark",[10,14,17,25,28,31,34,40,43,49,52,58,61,64,103,106,112,115,141,144,150,153,156,176,179,185,188,194,200,206,209,215,218,221,224,230,233,271],[11,12,13],"p",{},"Every profitable fix-and-flip starts with the same thing: a thorough deal analysis before you ever make an offer. The numbers either work or they do not. Skipping steps or relying on gut feeling is how investors lose money on flips.",[11,15,16],{},"This guide walks through each part of a fix-and-flip analysis, from calculating after repair value to accounting for hard money loan costs and setting realistic profit targets.",[18,19,21],"h3",{"id":20},"start-with-after-repair-value-arv",[22,23,24],"strong",{},"Start with After Repair Value (ARV)",[11,26,27],{},"ARV is the estimated market value of the property after all renovations are complete. It is the single most important number in your analysis because every other calculation flows from it. Get ARV wrong, and the entire deal falls apart.",[11,29,30],{},"To estimate ARV, pull comparable sales (comps) from the MLS or public records. Look for properties within a half-mile radius that sold in the last 90 to 180 days. Match on square footage, bedroom and bathroom count, lot size, age, and condition. Adjust for differences. If a comp has a two-car garage and yours has a one-car, deduct accordingly.",[11,32,33],{},"Use at least three to five solid comps. Throw out outliers. Your ARV should be conservative. Lenders will also run their own ARV analysis, and most will lend based on a percentage of ARV, typically between 65% and 75% of the after repair value.",[18,35,37],{"id":36},"apply-the-70-rule",[22,38,39],{},"Apply the 70% Rule",[11,41,42],{},"The 70% rule is the standard screening formula for flips. It says your maximum purchase price should be no more than 70% of ARV, minus estimated rehab costs.",[11,44,45,48],{},[22,46,47],{},"Formula:"," Maximum Purchase Price = (ARV x 0.70) - Rehab Costs",[11,50,51],{},"For example, if ARV is $300,000 and rehab costs are $40,000, your max offer would be $170,000. This formula builds in a margin for profit, closing costs, and carrying expenses. It is a starting point, not a guarantee. In competitive markets, some investors adjust to 75%, but that tightens margins and increases risk.",[18,53,55],{"id":54},"estimate-rehab-costs-accurately",[22,56,57],{},"Estimate Rehab Costs Accurately",[11,59,60],{},"Rehab budgets are where deals go sideways. Underestimating renovation costs is the most common mistake new flippers make. Build your budget line by line, not as a lump sum guess.",[11,62,63],{},"Break costs into categories:",[65,66,67,74,80,86,92,98],"ul",{},[68,69,70,73],"li",{},[22,71,72],{},"Exterior:"," roof, siding, windows, landscaping, driveway",[68,75,76,79],{},[22,77,78],{},"Interior:"," flooring, paint, drywall, trim, fixtures",[68,81,82,85],{},[22,83,84],{},"Kitchen:"," cabinets, countertops, appliances, plumbing",[68,87,88,91],{},[22,89,90],{},"Bathrooms:"," tile, vanities, fixtures, plumbing",[68,93,94,97],{},[22,95,96],{},"Systems:"," HVAC, electrical, plumbing rough-ins",[68,99,100],{},[22,101,102],{},"Permits and fees",[11,104,105],{},"Get contractor bids before making an offer whenever possible. If you are estimating on your own, use per-square-foot cost ranges from recent projects in your market. Add a contingency reserve of 10% to 15% on top of your total. Older homes and properties with deferred maintenance should have a larger buffer. Running out of rehab funds mid-project is one of the fastest ways to kill your profit.",[18,107,109],{"id":108},"run-comps-the-right-way",[22,110,111],{},"Run Comps the Right Way",[11,113,114],{},"Good comps are the foundation of your ARV and your exit strategy. Weak comps lead to bad decisions. Here is what to look for:",[65,116,117,123,129,135],{},[68,118,119,122],{},[22,120,121],{},"Proximity:"," within a half-mile, ideally in the same subdivision or neighborhood",[68,124,125,128],{},[22,126,127],{},"Recency:"," sold within 90 days is best, 180 days maximum",[68,130,131,134],{},[22,132,133],{},"Similarity:"," match bedroom and bathroom count, square footage (within 10-15%), and property type",[68,136,137,140],{},[22,138,139],{},"Condition:"," compare to what your property will look like after rehab, not what it looks like now",[11,142,143],{},"Pay attention to days on market for your comps. If similar homes are sitting for 60 to 90 days, factor that into your holding cost estimates. A slow market can eat into your profits quickly.",[18,145,147],{"id":146},"calculate-holding-costs",[22,148,149],{},"Calculate Holding Costs",[11,151,152],{},"Holding costs are the expenses that pile up every month you own the property. Many new investors underestimate these because they focus only on purchase and rehab. But on a typical six-month flip, holding costs can add up to $10,000 to $20,000 or more.",[11,154,155],{},"Common holding costs include:",[65,157,158,161,164,167,170,173],{},[68,159,160],{},"Loan interest payments (your largest monthly expense on a hard money loan)",[68,162,163],{},"Property taxes (prorated monthly)",[68,165,166],{},"Homeowner's insurance",[68,168,169],{},"Utilities (electric, water, gas)",[68,171,172],{},"HOA dues if applicable",[68,174,175],{},"Lawn care and property maintenance",[11,177,178],{},"Estimate your total project timeline honestly. Include the rehab period, listing time, and closing period. Then multiply your monthly holding costs by that number. Add at least one extra month as a buffer.",[18,180,182],{"id":181},"factor-in-hard-money-loan-costs",[22,183,184],{},"Factor in Hard Money Loan Costs",[11,186,187],{},"If you are financing your flip with a hard money loan, the loan itself has costs beyond the interest rate. You need to account for all of them to get an accurate profit projection.",[11,189,190,193],{},[22,191,192],{},"Points (origination fees):"," Most hard money lenders charge 1 to 3 points upfront. One point equals 1% of the loan amount. On a $200,000 loan, 2 points is $4,000 paid at closing.",[11,195,196,199],{},[22,197,198],{},"Interest:"," Hard money rates typically range from the high single digits to low double digits. Calculate total interest based on the loan amount and your expected hold period. On a $200,000 loan at 11% annual interest held for six months, you would pay roughly $11,000 in interest.",[11,201,202,205],{},[22,203,204],{},"Other fees:"," Watch for document preparation fees, inspection fees, draw fees on rehab disbursements, and extension fees if you need more time. These add up. Ask your lender for a full fee schedule before committing.",[11,207,208],{},"To calculate the true cost of a hard money loan, add up points, total interest over the hold period, and all fees. Compare that total against your projected profit to make sure the deal still makes sense.",[18,210,212],{"id":211},"set-realistic-profit-margin-targets",[22,213,214],{},"Set Realistic Profit Margin Targets",[11,216,217],{},"After you have calculated ARV, rehab costs, purchase price, holding costs, loan costs, and closing costs on both the buy and sell sides, subtract everything from your projected sale price. What is left is your profit.",[11,219,220],{},"Most experienced flippers target a minimum net profit of $25,000 to $30,000 per deal, or 10% to 15% of ARV. Anything below that does not justify the risk and effort involved. If your numbers land at a $12,000 profit on a $300,000 ARV property, one surprise expense wipes you out.",[11,222,223],{},"Build your analysis in a spreadsheet and stress-test it. What happens if the property sells for 5% less than ARV? What if rehab takes two months longer? If the deal cannot survive reasonable worst-case adjustments, walk away.",[18,225,227],{"id":226},"red-flags-that-kill-deals",[22,228,229],{},"Red Flags That Kill Deals",[11,231,232],{},"Some problems are not worth solving, no matter how attractive the price looks on paper. Watch for these deal killers:",[65,234,235,241,247,253,259,265],{},[68,236,237,240],{},[22,238,239],{},"Foundation or structural damage:"," repair costs are unpredictable and can spiral well beyond estimates",[68,242,243,246],{},[22,244,245],{},"Environmental hazards:"," mold, asbestos, lead paint, or contaminated soil add cost, time, and liability",[68,248,249,252],{},[22,250,251],{},"Title issues:"," liens, boundary disputes, or clouded title can delay or prevent closing",[68,254,255,258],{},[22,256,257],{},"Zoning or permitting restrictions:"," verify the property's zoning allows your intended use before going under contract",[68,260,261,264],{},[22,262,263],{},"Declining market values:"," if comps show a downward trend in the neighborhood, your ARV estimate may be too high by the time you finish and list",[68,266,267,270],{},[22,268,269],{},"No comparable sales:"," if you cannot find strong comps, you cannot confidently estimate ARV, and neither can your lender",[11,272,273],{},"A disciplined deal analysis protects you from costly mistakes. Run every number, verify your assumptions, and do not fall in love with a property before the math checks out. The best flippers pass on more deals than they take. That selectivity is what keeps them profitable.",{"title":275,"searchDepth":276,"depth":276,"links":277},"",2,[278,280,281,282,283,284,285,286],{"id":20,"depth":279,"text":24},3,{"id":36,"depth":279,"text":39},{"id":54,"depth":279,"text":57},{"id":108,"depth":279,"text":111},{"id":146,"depth":279,"text":149},{"id":181,"depth":279,"text":184},{"id":211,"depth":279,"text":214},{"id":226,"depth":279,"text":229},null,"Learn how to analyze a fix-and-flip deal using ARV, the 70% rule, rehab estimates, comps, holding costs, and hard money loan math.","md",[291,294,297,300,303],{"question":292,"answer":293},"What is the 70% rule in fix-and-flip investing?","The 70% rule states that you should pay no more than 70% of a property's after repair value (ARV), minus the estimated rehab costs. It is a quick screening formula that helps investors avoid overpaying for a flip.",{"question":295,"answer":296},"How do I calculate ARV for a fix-and-flip property?","ARV is calculated by analyzing recent comparable sales (comps) in the same neighborhood. Look for properties with similar square footage, bedroom and bathroom counts, lot size, and condition that sold within the past 90 to 180 days. Adjust for differences, then use the average or median adjusted sale price as your ARV.",{"question":298,"answer":299},"What holding costs should I include in my flip analysis?","Holding costs include loan interest payments, property taxes, insurance, utilities, HOA dues if applicable, and lawn or property maintenance. These costs accrue every month the property sits unsold, so accurate timeline estimates are important.",{"question":301,"answer":302},"How much contingency should I add to my rehab budget?","Most experienced flippers add a 10% to 15% contingency reserve on top of their total rehab estimate. Older properties or those with unknown conditions may require a larger buffer. Running out of rehab funds mid-project can stall the entire deal.",{"question":304,"answer":305},"What are common red flags that kill a fix-and-flip deal?","Major red flags include foundation or structural damage, environmental hazards like mold or asbestos, title issues, zoning restrictions, declining neighborhood values, and unrealistic ARV estimates. Any of these can erode your profit margin or make the project unfinanceable.","\u002Fimages\u002Farticles\u002F6f767b675fe240ca86104e3b57fd73fb.webp",{},true,"\u002Farticles\u002Fhow-to-analyze-fix-and-flip-deal","2026-01-06",{"title":5,"description":288},"articles\u002Fhow-to-analyze-fix-and-flip-deal","A step-by-step breakdown of how to analyze a fix-and-flip deal, from ARV and the 70% rule to rehab budgets, holding costs, hard money loan expenses, and profit targets.","dsGJgHCmwlm3fO89QPZVYb6lC5YZ7b0FtPCb_mdlrxk",[316,321],{"title":317,"path":318,"stem":319,"description":320,"children":-1},"Hold vs Flip: Investment Property Strategy","\u002Farticles\u002Fhold-vs-flip-investment-property","articles\u002Fhold-vs-flip-investment-property","Compare holding and flipping investment properties. Learn the financial analysis, tax implications, financing, and market conditions for each strategy.",{"title":322,"path":323,"stem":324,"description":325,"children":-1},"How to Calculate ROI on a House Flip","\u002Farticles\u002Fhow-to-calculate-roi-house-flip","articles\u002Fhow-to-calculate-roi-house-flip","Learn how to calculate ROI on a house flip. Covers the ROI formula, all project costs, a worked example with real numbers, and tips to improve returns.",1793296222293]