The fix and flip strategy consists of buying a property and renovating it with the hope to sell the renovated property at a profit. In order to consistently win at the fix and flip strategy, you need to understand the whole process and diligently stick to a strategy.
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 Or, the purchase price plus the renovation costs should be less than 70% of the ARV.
The process of fixing and flipping is broken down into 3 high level parts. These are the purchase, renovation, and sale. Executing on each of these steps are important for achieving the ultimate goal of a profitable flip.
The first step when flipping a house is to find a property to flip. What is a distressed property? A distressed property, is a property that requires work to get it to the optimum sale state.