I have flipped over 30 houses in the last 4 years. During this time I have executed on a wide variety of strategies, with most of the flips being extensive renovations.
A very popular rule in the fix and flip industry is called the 70% rule. It is defined as: ARV * .7 > Purchase Price + Renovation Costs
It makes more sense to include more precise estimated costs for as many items as you can possibly project such as: real estate agent fees and transfer taxes when selling as the transaction costs.
The process of fixing and flipping is broken down into 3 high level parts. These are the purchase, renovation, and sale.
What is a distressed property? A distressed property, is a property that requires work to get it to the optimum sale state.