The rehab isn’t the cost.
It’s the engine.
A flip makes money because you force the value up: buy a house the market wrote down, fix exactly what it was written down for. Done right, $50–75K on a single-family deal is an ordinary outcome.
Your deal, your numbers
Your deal
This is the engine, not the enemy. The right scope returns more in ARV than it costs.
Carry runs about $2,643/mo here — hard money at 12% on 85% of cost, plus taxes, insurance and utilities.
What you make
Profit before sale costs
$119,427
44% return on cash in · every $1 of rehab returned 2.33 in value
Where the $400,000 goes
| Value created (ARV − purchase − rehab) | $140,000 |
| Carry, 4 months | − $10,573 |
| Our fee | − $10,000 |
Every rehab dollar has to come back bigger
A deal that works
You buy at
$200,000
You spend
$60,000
It appraises at
$400,000
You clear
~$119,000
Not the market, not time — the gap between what the house is worth as it sits and what it’s worth finished, minus what it costs to close that gap.
Not all rehab dollars are equal
Cosmetic
Paint, floors, fixtures, landscapingCheapest lift per dollar. Buyers price a house on eight photos — this changes all eight.
Kitchen & baths
The rooms that set the priceThese two rooms move an appraisal more than square footage does. Fixing them unlocks value well past their cost.
Systems
Roof, HVAC, electrical, plumbingBuys buyers, not beauty. Budget it honestly — unresolved, it scares off financing and every retail buyer.
Reconfiguration
Walls, additions, converted spaceBiggest lift, biggest risk. Can re-rate a house into a different comp set — with real scope discipline.
No value to add? Then the profit comes from the buy
Run the calculator with a small rehab: to still clear $50–75K, the purchase price has to drop hard. Those steals exist — estates, bank-owned, long-stale listings — but the trap is the clean, dated house at a fair price: little to fix, so little to add, and no reason for the seller to discount. It looks safe. It usually isn’t a deal.
We do this math before you ever see the property.
Comp-verified ARV, a line-item scope read off the actual photos, and an offer range with the risks named out loud.
Talk to us about your buy boxFigures are illustrative — not an appraisal, an offer, or a projection for any specific property. Every real deal gets underwritten on its own comps. The 247 Broker