($300,000 x 0.70) - $50,000 = 3. Key Phases of a Flip
(which are higher than long-term rates).
(typically 5-6% of the final sale).
Finding "distressed" properties—houses that are physically run-down, in foreclosure, or owned by sellers needing a quick exit.
Most flippers use "Hard Money" loans. These are short-term, high-interest loans based on the property's value rather than the borrower's credit score. buying and flipping homes
Always include a 15-20% "contingency fund" for hidden issues like mold, structural damage, or outdated wiring found behind walls.
The goal of a flip is to minimize the "holding time." The longer you own the property, the more your profits are eaten away by taxes, insurance, utilities, and interest payments (often called ). 2. The Golden Rule: The 70% Formula ($300,000 x 0
You can fix a house, but you can’t fix a neighborhood. Always buy the worst house on a good block, rather than the best house on a bad block. 5. Financial Considerations