What Is a Fix and Flip?

A flip is priced backward from the resale. The investor estimates after-repair value from comparable sales, subtracts the repair budget, holding costs, financing costs, selling costs, and a target profit, and arrives at the most they can pay. Funding often comes from hard money, private lenders, or cash, with the loan repaid at resale. Speed matters because every month adds interest, taxes, insurance, and utilities, so flippers favor contracts with a quick close, clear title, and a repair scope they can estimate.

Flippers are one of the core end buyers for wholesale deals. A dispo manager has to know each flipper’s price band, neighborhoods, preferred rehab level, and typical close speed, then match deals accordingly, because a flipper who wants light cosmetic work will pass on a structural project. What flippers need from the wholesaler is an honest package: accurate comps, photos, a believable repair estimate, and no surprises on title or access. Acquisitions callers support this by capturing the details of condition and occupancy that flippers use to estimate rehab.

The classic errors are an inflated after-repair value, a rehab budget that skips hidden problems, and a timeline that ignores permits and contractor availability. Each shrinks the margin quickly because holding and financing costs keep running. Another trap is using comps from fully updated homes to value a house whose finished product will not match them. Experienced buyers build a cushion for the unknown, and they walk away from deals that only work if everything goes right. Local rules on permits and licensed trades vary, so scope and compliance need to be checked early.