How to Analyze a House Flip
A flip is a margin-and-timeline business. The goal is to see whether modeled profit still looks reasonable when rehab, holding, and sale assumptions are stressed—not just when everything goes right.
Core inputs
- 1
Purchase and closing
Include acquisition costs you will actually incur, not a rounded “rule of thumb” unless you have verified it for your market.
- 2
Rehab budget and timeline
Split hard costs, soft costs, and contingency. Extend the timeline in a stress case—holding costs often dominate surprises.
- 3
After-repair value and sale costs
ARV should be defensible for the finished product. Layer commissions, closing, and seller concessions into the exit.
- 4
Risk read
HeraclesIQ may highlight risk signals based on your inputs—use them to guide diligence, not as a substitute for inspection and contractor bids.
Common mistakes
Optimistic ARV, razor-thin rehab contingency, and ignored holding costs are frequent issues. If modeled profit collapses under small changes, that may indicate you need more margin or better information—not a bigger spreadsheet.
Open the Deal Analyzer for flip modeling, and use the Rehab Stress Test if you want overrun and delay scenarios.
FAQ
What is the biggest mistake new flippers make?
Underestimating holding costs and timeline slip—carrying costs compound quickly.
How should I think about ARV?
Anchor ARV to realistic buyer demand; small ARV changes can swing modeled profit materially.