Fix & Flip: Buy, Improve, Sell

How the investment works

You buy a property that needs work, complete a defined renovation and sell the finished property. The goal is to create enough value to cover the purchase, renovation and all other expenses, with money left over.

What drives the numbers

Start with the purchase price, written work budget and estimated finished value, often called after-repair value or ARV. Then include closing costs, loan charges, interest, taxes, insurance, utilities, selling costs and contingency. The difference between ARV and purchase plus renovation is a gross value spread, not profit.

What can change the outcome

Hidden repairs, permit delays, contractor problems, a longer sale period or a lower sale price can use up the expected cushion. Consider what happens if the project costs more or takes longer than planned.

Before you begin

Understand who is doing the work, when you must pay them, what supports your finished-value estimate and how much cash you can keep available. The purchase and renovation illustration does not verify those assumptions.

Your quick checklist

• Describe the work before choosing a budget.
• Use evidence for the finished value.
• Include costs beyond construction.
• Plan for delays and a sale below your first estimate.