Fix and Flip

Fix and flip is an investing strategy where a buyer purchases a distressed property, renovates it, and resells it for a profit.

Fix and flip is the strategy of buying a distressed or outdated property, renovating it, and reselling it — usually to a retail homebuyer — for a profit. The flipper's profit is what is left of the resale price after the purchase price, rehab costs, holding costs (loan interest, taxes, insurance, utilities), and selling costs (agent commissions, closing costs) all come out.

Flippers are core buyers for wholesalers. A typical flip deal starts with the after repair value: the flipper estimates what the renovated house will sell for, subtracts the rehab budget and their required margin, and works backward to a maximum purchase price — the 70% rule is the classic shortcut for this math. If a wholesaler's contract price fits under that number, the deal trades.

What beginners get wrong is almost always the same two things: underestimating the rehab and underestimating the timeline. A missed foundation issue or an extra three months of holding costs can erase the entire profit margin. Experienced flippers build a contingency into every budget and treat the calendar as a cost. If you are wholesaling to flippers, respect their math — a deal that only works with a fantasy rehab number is not a deal, and experienced buyers will spot it instantly.