Strategy
Fix-and-flip
Buy a property that needs work, renovate it and sell it. The margin has to survive a lower sale price, a bigger renovation budget and a longer hold.
What it is
A flip earns the difference between what the renovated property sells for and everything it cost to get there: the purchase, closing, the renovation, months of holding costs and the costs of selling. Most of that is known only approximately when you make the offer.
The analyzer works backwards. Start from a conservative after-repair value, subtract every cost and your target margin, and you get the most you can pay. Then it shows what happens when the renovation runs over or the sale takes longer.
Key metrics, in plain English
These are the definitions the analyzer uses. Every input is visible and editable, and each is marked as a verified record, an estimate or your assumption.
- After-repair value (ARV)
What the property could sell for once renovated.
Always your estimate, shown with a range. Just value from the tax roll is not an ARV and is never used as one.
- All-in cost
Purchase price + closing costs + renovation budget (with contingency) + holding costs + selling costs.
Holding costs include loan interest, tax, insurance, utilities and association dues for each month you own it.
- Projected profit
ARV − all-in cost.
- ROI
Projected profit ÷ cash invested.
Annualised ROI adjusts for how many months the project takes.
- Profit margin
Projected profit ÷ ARV.
- Maximum allowable offer (MAO)
ARV − renovation − holding − selling − closing costs − your target profit.
The highest price that still leaves the margin you set. Rules of thumb such as “70% of ARV” are shown for comparison only.
South Florida risks to price in
Local factors that can turn a workable deal into a losing one. Confirm each with a licensed professional.
Permits and open permits
Unpermitted work and permits left open by previous owners can delay a sale or force rework. Check the permit history with the city or county building department before you buy.
Flood zones and the 50% rule
In a FEMA special flood hazard area, improvements costing 50% or more of the building’s market value can require the whole structure to meet current flood rules, including elevation. That can change a renovation budget completely.
Insurance and the buyer’s costs
Builder’s risk or vacant-property cover is often expensive. Your eventual buyer’s insurance and condominium costs also affect what they can pay, and so your ARV.
Hurricane season and timing
Storms between June 1 and November 30 can stop work, raise material and labour costs and pause insurance binding near closing. Model a hold three to six months longer than planned.
Work back from a conservative ARV.
Set your margin, add a contingency, and see the most you can pay. Then stress-test the overrun and the longer hold.