Definition
Fix and flip means buying undervalued properties (20-30% below market), renovating, and selling quickly for profit. Holding periods are typically 6-12 months.
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Fix and flip investors look for properties 20-30% below market value due to condition issues. Success depends on accurate renovation cost estimation, local market knowledge, and ability to execute quickly. Holding periods are typically 6-12 months. This strategy requires capital, construction expertise or contractor relationships, and works best in appreciating markets with good buyer demand.
Pro Tip
Underestimate resale prices and overestimate renovation costs. Most flips fail due to cost overruns.
Example
An investor purchases a foreclosure for $150,000, invests $50,000 in renovations, and sells for $240,000 netting $40,000 profit