How to Fix and Flip Real Estate for Profit

In the last post we discussed the Who, What, When and Where to focus your attention on when investing in fix and flip properties. Those 4 elements are the most overlooked but vital elements to a successful flip and can be the difference between profits and loss. If you missed it, I strongly urge you to read this Who, What, When and Where to Invest first.

The how is often where investors focus their attention and they miss the key elements of the investment

How to Fix and Flip Real Estate for ProfitWhile we have touched on the How, I wanted to dive deeper into the How.

Seasoned investors have plowed the path and made plenty of mistakes along the way so taking lessons from their benefits as well as failures will make life easier for you and your investment more profitable.

Now that you identified the best property in the best location and know who your team of professionals and tradesmen’s are and you know what your exit strategy is, it is time to get to work and renovate this baby.

Working smart is better than working hard

Wow, I cannot illustrate this one enough. A great flip is one that has had proper diligence put into the flip and exit strategy. You can easily see what seasoned investors have figured out.

You indeed make your money going in.

Focus more on the big picture. While many new investors focus primarily on the actual renovation, the renovation is actually a smaller part of the bigger picture. All the diligence you do in advance is where the profitability is identified.

It is the renovations that allow you to realize the profit, but the strategy that went into the renovation is the key to the success.

Success in flipping starts with proper renovations and fixes

I have seen many investors who want to just put a new coat of paint on the walls and clean up the yard and call it a renovation. I have also seen many new investors over improve; it is easy to get caught up in things you like and renovate to match your taste.

Renovating to match the quality of neighboring homes and price point of the neighborhood is paramount and needs to be adhered to. Replace things that better serve replaced, and fix what makes sense to fix.

Mastering this will make your budgeting easier and your renovations more successful. When possible tour some neighboring homes that are for sale and see what the area homes consist of.

Create accurate budgets

The formula seems so simple. Purchase price of property plus acquisition cost plus renovation costs plus holding costs plus liquidation costs, equals your breakeven point. Subtract this number from your sale price and you have your return on Investment (ROI)

As easy as the formula is,coming up with these accurate numbers is paramount for success. If you are new to this area of budgeting, I strongly suggest you have a mentor to help here as there is no one size fits all formula.

Looking for a great mentor? Check out my Real Estate Mentorship Program!

How much does it cost for …

Knowing price per sq. ft. of carpet and tile will be important. Painting cost per room, kitchen replacement cost per linear foot. cost per square for roof replacement. Average cost for a bathroom upgrade. Etc etc.

While much of this appears to be guess work, as you become experienced in what prices are for renovation it becomes much easier to pin down an accurate estimation.

TIP: keep a log of all these prices so you can easily reference them in the future, breaking these costs down to a per room basis or per sq. ft. or per linear foot basis will make creating a budget for your next flip much easier.

Having a contingency fund is also paramount

There is no way even the most experienced investor can account for every little expense that will occur when renovating a property because there are always unknown circumstances that appear when you start opening up walls and moving things around.

So how much for a contingency fund?

Again no one size fits all and depending on where you are renovating, the renovations cost etc. this may vary. I typically will add 10 to 15% to total renovation costs.

Budgeting, don’t forget your holding (6 months recommended) acquisition and liquidation costs

  • Financing costs: (If you financed assume 6 months)
  • HOA fees
  • Utility bills
  • Insurances
  • Taxes
  • Misc
  • Acquisition: closing cost on the purchase, title insurance, financing points for loan,etc
  • Liquidations costs: closing cost on the sale, title insurance for the new buyers if required in your area. Realtor and or attorney fees.

Meanwhile your renovations are being performed.

While your renovation team is busy doing the updates you should be prepping for your exit strategy:

Have your Realtors in place and have the marketing all lined up.

Tip: usually on your home renovation shows they get the house all fixed up and then do the yard work at the last minute. I prefer the opposite. Draw attention to your flip by doing exterior first. People watching the property will see a nice change and will eagerly wait to see what you do to the rest of the property. People buy curb appeal, it is always the first thing they see so get the curb appeal looking great first then you can start marketing early.

As the renovations are nearing completion you will also be nearing the end of your time commitment for this property. So this is a great time to start looking for the next flip. With all your real estate TEAM members in place you should have trained them as well what you want within a flip and they all should be eyes and ears on the market watching for you


Hopefully you stayed on budget and stuck to your plan. With the property complete and all realtors in place market and sell the property. Your advance diligence should have told you how to price it but as weeks or months have passed you will want to revisit the latest comparable to see where you are at. Price to match the market, do no price to match your emotions. The house will sell for what the market will bear.

Time to repeat, take what you learned and duplicate what works and make adjustments to those things that did not work so well, document these successes, create your punch list. Your future flips will be easier and perhaps more profitable.

Happy Investing!