The Fix-and-Flip investment method has become one of the most attractive ways for real estate investors to make a quick profit from a property. Fixing and flipping properties have many upside and benefits, but there are also things to be cautious of, more so for first time Fix-and-Flippers.

Where do I start?

When looking for a property to purchase as a Fix-and-Flip investment, finding a property in the right location is very important. The property must be a “smart” purchase, or what some refer to as, “buying right.” This is critical for maximizing your profit, planning thoroughly, and accounting for every detail in order to make this process the most successful. 

The “70% Rule” is a great calculation for the available spending cap for your investment property. Though the “70% Rule” is not actually a rule, it is a great measure to ensure you are not overpaying for the property and are including all costs for repairs, this will ultimately aid in avoiding slimming down your profit margins or losing money on an investment property. The “70% Rule” means that you should not pay any more than 70% of the property’s after repair value, minus the costs or repairs and renovations. 

Of course, paying less than 70% is more than ideal, and paying more than 70% does not mean you will not make profit, but it is the suggested number to not pass, as it gives wiggle room for costs all around. Like any investment, proper planning and research can only benefit you, the investor, in the long run.