Fix-and-flip success starts with buying the right house. A low price alone isn’t enough—you need to find a property with profit potential. Here’s how to spot a good deal before you buy.
Location Matters
A house in the right area sells faster and for a better price. Look for neighborhoods with rising home values, low crime, good schools, and easy access to jobs and amenities. Avoid areas with declining property values or too many vacant homes.
The Right Type of Property
Stick to properties that appeal to the average buyer. Single-family homes sell faster than unusual layouts or oversized houses. A home with a logical floor plan and standard features is easier to update and resell. Avoid houses with odd room configurations or expensive-to-fix design flaws.
Cosmetic Fixes Over Structural Issues
Some homes look rough but only need basic updates like fresh paint, new flooring, or modern fixtures. These are the best flips. Major repairs—like foundation issues, outdated plumbing, or a failing roof—can drain your budget fast. Big repairs also take longer, delaying your sale and increasing holding costs.
Know the Numbers Before You Buy
Run the numbers before making an offer. Factor in purchase price, repair costs, taxes, insurance, and selling expenses. A common rule is the 70% rule—pay no more than 70% of the after-repair value (ARV) minus the cost of renovations. If the numbers don’t work, move on.
Check Days on Market and Comparable Sales
Look at how fast similar homes in the area are selling. If homes sit on the market too long, you may struggle to sell quickly. Check recent sales to see what buyers are willing to pay for homes like yours. If renovated homes are selling fast, it’s a good sign. This is something a experienced REALTOR® can help you with!
Permits and Zoning Restrictions
Some renovations require permits, which can delay projects and add costs. Before buying, check local zoning laws and permit requirements. If you can’t make the changes you need, the flip won’t be worth it.
Look for Motivated Sellers
Distressed properties or owners who need to sell fast can mean a better deal for you. Foreclosures, estate sales, and homes that have been on the market for a long time often sell below market value. A lower purchase price gives you more room for profit.
Fixing and flipping isn’t just about buying cheap—it’s about buying smart. The right location, manageable repairs, and solid numbers make the difference between profit and a money pit.
