A flip deal is a math problem with timeline risk attached.
If you model the deal conservatively, you win even when reality adds friction.
If you model the deal optimistically, you lose when anything goes slightly wrong.
The model must include holding costs, sale costs, and buffer time, not just purchase and rehab.
The most important variable is not ARV [After Repair Value]; it’s ARV minus reality (DOM [Days on Market], concessions, and delays).
Use this model to evaluate flips like an operator, not like a gambler.

At a glance

• Use conservative ARV [After Repair Value] and conservative timeline assumptions
• Include holding costs (interest, utilities, insurance, taxes)
• Include sale costs (agent fees, closing costs, concessions)
• Include contingency (rehab and timeline)
• Stress-test the deal with +60 days and -5% ARV
• If it still works under stress, it’s a real deal

The model (copy/paste framework)

Use this framework:

A) Acquisition

• Purchase price:
• Closing costs (buy side):
• Initial repairs needed before financing milestones (if any):

B) Rehab

• Line-item rehab budget:
• Contingency (10–15% depending on scope):

C) Financing and holding costs

• Monthly interest estimate:
• Monthly taxes (pro-rated):
• Monthly insurance:
• Monthly utilities:
• HOA [Homeowners Association] (if applicable):
• Monthly maintenance/security:
• Total months owned (rehab + listing + DOM [Days on Market] + closing):

D) Sale assumptions

• ARV [After Repair Value] (conservative):
• Expected sale price (conservative):
• Sale costs (agent + closing costs):
• Concessions/repairs at sale:

E) Profit

Profit = Sale proceeds – (Acquisition + Rehab + Holding + Sale costs)

Stress tests that separate pros from amateurs

Run these two tests:

1. ARV stress: reduce expected sale price by 5%
2. Timeline stress: add 60 days of holding costs

If the deal fails either test, fix structure:

• negotiate purchase price
• reduce scope or complexity
• increase contingency and cash buffer
• choose a more liquid neighborhood
• avoid projects dependent on perfect timing

A simple margin rule that prevents regret

If your projected profit only exists under perfect assumptions, it is not profit. It is noise. A real flip has margin that survives friction.

Next step

Fix & flip program: https://ambitionlending.co/fix-flip-loans/
Hard money program: https://ambitionlending.co/hard-money-loans/
Submit a deal for review: https://ambitionlending.co/contact/

Frequently Asked Questions