house-flipper

name	house-flipper
description	Expert guidance for residential property flipping including acquisition strategies (MLS, auctions, wholesalers), renovation scope assessment, contractor management, budget tracking using the 70% rule, timeline planning, After Repair Value (ARV) calculation, and selling strategy for maximum profit. Use when the user asks about house flipper or needs help with related topics. Do NOT use for unrelated domains or when a more specialized skill exists.
license	Apache-2.0
metadata	{"author":"foundry-skills","version":"1.0.0","tags":"home-buying personal-finance investing","category":"personal-finance","subcategory":"major-purchases","depends":"","disclaimer":"educational-finance","difficulty":"intermediate"}

House Flipper

Disclaimer: This skill provides educational information about financial concepts and general guidance for personal financial planning. It does NOT constitute financial advice, investment recommendations, or tax guidance. Individual financial circumstances vary significantly, and the information provided should not be relied upon as a substitute for professional counsel. Always consult a qualified financial advisor, tax professional, or licensed financial planner before making financial decisions.

When to Use

Process

1. Gather requirements. Ask the user clarifying questions about their specific context, goals, constraints, and experience level.

2. Analyze the situation. Review the information provided and identify key factors, challenges, and opportunities relevant to house flipper.

3. Develop the framework. Create a structured approach tailored to the user's needs, incorporating best practices and domain-specific considerations.

4. Deliver actionable output. Present specific, implementable recommendations with clear rationale, timelines, and success criteria.

5. Address edge cases. Proactively identify potential issues, alternative approaches, and contingency plans.

Use this skill when:

• User needs guidance on house flipper
• User asks about house flipper best practices or techniques
• User wants a structured approach to house flipper

Do NOT use this skill when:

• A more specialized skill exists for the specific subtopic
• The request is outside the scope of house flipper

Questions to Ask First

1. What is your total available capital for this project (cash, credit lines, partnerships)?
2. Do you have experience with home renovation or construction?
3. What is your target market and price range?
4. Do you have reliable contractors already, or do you need to build a team?
5. Is this a full-time pursuit or a side project alongside other work?
6. What is your risk tolerance -- can you absorb a loss on your first project?
7. Do you have a real estate agent experienced with investment properties?
8. Have you researched local permit requirements and timelines?
9. What is your target timeline from purchase to sale?
10. Do you have a holding cost budget if the property does not sell quickly?

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Phase 1: The 70% Rule and Deal Analysis

The 70% Rule

Maximum Purchase Price = (ARV x 70%) - Renovation Costs

ARV = After Repair Value (what the home will be worth fully renovated)

Example:
  ARV: $300,000
  70% of ARV: $210,000
  Estimated Renovation: $50,000
  Maximum Purchase Price: $210,000 - $50,000 = $160,000

The 30% margin covers:

• Buying closing costs (1-3%)
• Holding costs (mortgage, taxes, insurance, utilities during renovation)
• Selling costs (agent commissions 5-6%, seller closing costs 1-2%)
• Profit margin (target 10-15% of ARV minimum)
• Contingency buffer for unexpected costs

ARV Calculation

Step 1: Find 3-5 comparable renovated properties that have sold within the last 3-6 months.

Comparable criteria:

• Within 0.5-1 mile of subject property
• Similar square footage (within 10%)
• Same bedroom/bathroom count (or close)
• Similar lot size
• Same general neighborhood quality
• Renovated to similar level as your planned renovation

Step 2: Adjust comparables for differences (see Home Seller Guide CMA adjustments).

Step 3: Calculate average adjusted price per square foot and apply to your property.

ARV Calculation Worksheet:
Comp 1: _________ address, sold $_______, $/sqft: $_______
Comp 2: _________ address, sold $_______, $/sqft: $_______
Comp 3: _________ address, sold $_______, $/sqft: $_______
Average $/sqft after adjustments: $_______
Subject property sqft: _______
Estimated ARV: $_______

Full Flip Profitability Analysis

FLIP DEAL ANALYSIS
==================
Property Address: _________________________________

ACQUISITION:
  Purchase Price:                      $__________
  Closing Costs (buying):             $__________
  Total Acquisition Cost:              $__________

RENOVATION:
  Renovation Budget:                   $__________
  Contingency (15-20%):               $__________
  Total Renovation Cost:               $__________

HOLDING COSTS (Monthly x Estimated Months):
  Mortgage/Hard Money Payment:         $__________
  Property Taxes:                      $__________
  Insurance:                           $__________
  Utilities:                           $__________
  HOA (if applicable):                $__________
  Lawn/Snow/Maintenance:               $__________
  Monthly Holding Total:               $__________
  Estimated Hold Time: _____ months
  Total Holding Costs:                 $__________

SELLING COSTS:
  Agent Commission (5-6%):            $__________
  Closing Costs (selling):            $__________
  Staging:                             $__________
  Photography:                         $__________
  Total Selling Costs:                 $__________

SUMMARY:
  Expected Sale Price (ARV):           $__________
  Total Project Costs:                 $__________
  Estimated Profit:                    $__________
  ROI (Profit / Total Cash Invested):  _________%
  Profit Margin (Profit / ARV):        _________%

---

Phase 2: Acquisition Strategies

Finding Deals: Source Comparison

Source	Discount Potential	Competition	Effort Required	Best For
MLS (listed properties)	5-15% below market	High	Low	Beginning flippers
Wholesalers	15-30% below market	Medium	Medium	Consistent deal flow
Auctions (foreclosure)	20-40% below market	Medium-High	High	Experienced flippers
Direct mail/marketing	20-40% below market	Low	Very High	Serious full-time flippers
Driving for dollars	15-30% below market	Low	High	Local market knowledge
Probate/estate sales	10-25% below market	Low-Medium	Medium	Patient investors
Bank REOs	10-25% below market	Medium	Medium	All experience levels
Tax lien sales	Varies widely	Medium	High	Experienced investors

MLS Deal Finding Strategy

• Set alerts for keywords: "investor special," "as-is," "estate sale," "needs TLC," "handyman special"
• Filter for properties with 30+ days on market
• Look for price reductions
• Focus on the ugliest homes in the best neighborhoods
• Properties with expired listings may have motivated sellers

Auction Buying Checklist

• Research auction type (foreclosure, tax sale, estate)
• Inspect exterior thoroughly (interior access may be limited)
• Research title (liens, judgments, back taxes)
• Set maximum bid before the auction and do not exceed it
• Understand payment terms (often cash or cashier's check within 24-48 hours)
• Factor in unknown interior condition into your budget
• Have funds verified and ready before bidding
• Understand "as-is" terms and eviction requirements

Working with Wholesalers

• Build relationships with 3-5 active wholesalers in your market
• Verify their ARV and repair estimates independently
• Always inspect the property yourself before committing
• Negotiate -- wholesale prices have markup built in
• Close quickly and reliably to get first access to future deals
• Check assignment fee transparency

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Phase 3: Renovation Scope Assessment

Property Walkthrough Evaluation

Structural Assessment (Major Cost Items):

• Foundation: Cracks, settling, water intrusion, bowing walls
• Roof: Age, missing shingles, sagging, leaks, remaining life
• Framing: Load-bearing wall identification, structural integrity
• Grading and drainage: Water flow away from foundation

Systems Assessment:

• Electrical: Panel amperage (100A minimum for modern), wiring type (copper vs aluminum vs knob-and-tube), outlet count
• Plumbing: Pipe material (copper, PEX, galvanized, polybutylene), water pressure, drain condition
• HVAC: Age, condition, efficiency, ductwork condition
• Water heater: Age, capacity, type

Cosmetic Assessment:

• Flooring: Condition under carpet, hardwood salvageable?
• Walls: Drywall condition, texture, damage
• Kitchen: Layout, cabinets (reface vs replace), countertops, appliances
• Bathrooms: Fixtures, tile, vanities, layout
• Paint: Interior and exterior condition
• Windows: Condition, seal integrity, style/age
• Doors: Interior and exterior condition

Renovation Cost Estimating Guide

Project	Budget Range	Timeline
Full kitchen renovation	$15,000-$50,000	3-6 weeks
Kitchen cosmetic update	$5,000-$15,000	1-2 weeks
Full bathroom renovation	$8,000-$25,000	2-4 weeks
Bathroom cosmetic update	$2,000-$8,000	1-2 weeks
Roof replacement	$5,000-$15,000	2-5 days
HVAC replacement	$3,000-$10,000	1-3 days
Electrical panel upgrade	$1,500-$4,000	1-2 days
Full house paint (interior)	$3,000-$8,000	3-7 days
Flooring (whole house)	$5,000-$20,000	3-7 days
New windows (whole house)	$5,000-$20,000	1-3 days
Landscaping refresh	$1,000-$5,000	1-3 days
Siding replacement	$5,000-$15,000	1-2 weeks
Foundation repair	$5,000-$30,000+	1-4 weeks
Driveway replacement	$3,000-$8,000	2-5 days

Renovation Tiers: What Level of Finish?

Tier 1 - Cosmetic Flip (lowest cost, fastest): Paint, flooring, fixtures, hardware, landscaping, cleaning. Budget: $10,000-$25,000.

Tier 2 - Mid-Level Renovation: Everything in Tier 1 plus kitchen update (new counters, backsplash, appliances), bathroom updates, some mechanical work. Budget: $25,000-$60,000.

Tier 3 - Full Renovation: Everything in Tier 2 plus layout changes, new kitchen/bathrooms, new systems (HVAC, electrical, plumbing), windows, roof. Budget: $60,000-$150,000+.

Match renovation level to the neighborhood. Do not over-improve for the area.

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Phase 4: Contractor Management

Finding and Vetting Contractors

Finding contractors:

• Referrals from other investors (best source)
• Local real estate investor meetups and groups
• Licensed contractor directories (state licensing boards)
• Supplier referrals (lumber yards, plumbing supply houses)

Vetting checklist for each contractor:

• Verify active license (check state licensing board)
• Verify insurance (general liability + workers' comp)
• Check references (call 3+ recent clients)
• Review portfolio of completed work
• Get detailed written bid (not just a total number)
• Verify no complaints with BBB or state consumer protection
• Start with a small job to test reliability and quality

Bid Comparison Template

Project: ___________________

                    Contractor A  Contractor B  Contractor C
Company Name:       ___________   ___________   ___________
License #:          ___________   ___________   ___________
Insurance Verified: Y / N         Y / N         Y / N
Total Bid:          $__________   $__________   $__________
Materials Included: Y / N         Y / N         Y / N
Timeline:           ____ weeks    ____ weeks    ____ weeks
Payment Terms:      ___________   ___________   ___________
Warranty:           ___________   ___________   ___________
References Checked: Y / N         Y / N         Y / N

Payment Structure Best Practices

• Never pay more than 10-20% upfront (for materials)
• Structure payments based on milestones, not time
• Hold 10% retainage until final punch list is complete
• Pay for completed work only after inspection
• Use a written contract specifying scope, timeline, materials, and payment schedule

Common Contractor Issues and Solutions

Issue	Prevention	Response
Going over budget	Detailed scope and fixed-price contract	Change order process with written approval
Missing deadlines	Penalty clause in contract	Weekly check-ins, escalation process
Poor quality work	Clear specifications, reference photos	Do not pay until corrected, get independent opinion
No-shows	Multiple contractor relationships	Backup contractors identified in advance
Scope creep	Detailed contract, change order process	Written approval required for any additions

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Phase 5: Budget Tracking

Project Budget Tracker

RENOVATION BUDGET TRACKER
=========================
Property: _________________________________
Original Budget: $__________
Contingency (20%): $__________
Total Approved Budget: $__________

Category          | Budget    | Actual    | Variance  | Status
------------------+-----------+-----------+-----------+--------
Demolition        | $________ | $________ | $________ | ______
Structural        | $________ | $________ | $________ | ______
Electrical        | $________ | $________ | $________ | ______
Plumbing          | $________ | $________ | $________ | ______
HVAC              | $________ | $________ | $________ | ______
Framing/Drywall   | $________ | $________ | $________ | ______
Insulation        | $________ | $________ | $________ | ______
Roofing           | $________ | $________ | $________ | ______
Windows/Doors     | $________ | $________ | $________ | ______
Kitchen           | $________ | $________ | $________ | ______
Bathrooms         | $________ | $________ | $________ | ______
Flooring          | $________ | $________ | $________ | ______
Paint             | $________ | $________ | $________ | ______
Fixtures/Hardware | $________ | $________ | $________ | ______
Landscaping       | $________ | $________ | $________ | ______
Permits/Fees      | $________ | $________ | $________ | ______
Miscellaneous     | $________ | $________ | $________ | ______
------------------+-----------+-----------+-----------+--------
TOTALS            | $________ | $________ | $________ |
Contingency Used  | $________ |
Remaining Budget  | $________ |

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Phase 6: Timeline Planning

Typical Flip Timeline

Phase	Duration	Activities
Acquisition	2-4 weeks	Due diligence, closing
Planning	1-2 weeks	Design, permits, ordering materials, contractor scheduling
Demolition	3-7 days	Tear-out, debris removal
Rough work	2-4 weeks	Framing, electrical, plumbing, HVAC, inspections
Insulation/Drywall	1-2 weeks	Install, tape, mud, sand, prime
Finish work	3-6 weeks	Flooring, tile, cabinets, counters, trim, paint, fixtures
Final details	1-2 weeks	Punch list, cleaning, staging, photography
Sale	2-8 weeks	Listing, showings, offer, closing
Total	3-6 months	Varies significantly by scope

Timeline Management Tips

• Build in 2-week buffer between phases
• Order materials early (lead times can be 2-8 weeks for some items)
• Schedule inspections immediately when ready (can have multi-day waits)
• Have backup plans for weather delays (exterior work)
• Track critical path items that block other work
• Hold weekly project meetings with contractors

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Phase 7: Selling Strategy

Pre-Listing Preparation

• Professional staging (budget $1,500-$5,000; or virtual staging $200-$500)
• Professional photography and videography
• 3D virtual tour (Matterport or similar)
• Clean and detail entire property
• Final landscaping and curb appeal
• Touch up any construction wear
• All systems and appliances tested and operational
• Compile renovation documentation for buyers

Pricing a Flip

• Price at or slightly below ARV to generate immediate interest
• Create a "just completed" urgency
• Highlight all new/updated systems and finishes in listing
• Provide home warranty to give buyers confidence
• Consider pre-listing appraisal to support your price

If It Is Not Selling

Days on Market	Action
0-14	Monitor showing traffic and feedback
14-21	Adjust marketing, add virtual tour if missing
21-30	Consider 3-5% price reduction
30-45	Evaluate staging changes, second price reduction
45-60	Consider renting until market improves
60+	Aggressive price reduction or pivot to rental

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Common Flip Mistakes

1. Overestimating ARV -- use conservative comps and account for market shifts
2. Underestimating renovation costs -- always add 15-20% contingency
3. Ignoring holding costs -- they erode profit every month
4. Over-improving for the neighborhood -- match finishes to comparable sales
5. Skipping inspections before purchase -- unknown issues destroy budgets
6. Not having enough reserves -- unexpected costs are the norm, not the exception
7. Doing too much yourself -- your time has value; contractors are faster
8. Emotional attachment to design choices -- renovate for the target buyer, not yourself
9. Ignoring permits -- unpermitted work creates liability and can block sales
10. Not having an exit strategy -- if it won't sell, can you rent it profitably?

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Exit Strategy Planning

Always have a backup plan:

Plan A: Sell at target ARV for full profit Plan B: Reduce price to break even or small profit Plan C: Rent the property until market improves (ensure cash flow covers holding costs) Plan D: Refinance into long-term financing and hold as rental Plan E: Sell to another investor at wholesale price (minimize loss)

Run numbers for each exit strategy before purchasing. If the property only works under Plan A, the deal may be too risky.

Output Format

Deliver the response as a structured document with clear headings and actionable content. Use tables for comparisons, numbered lists for sequential steps, and bullet points for options. Include specific examples where applicable.

[House Flipper deliverable]
1. Context and objectives
2. Analysis or framework
3. Specific recommendations with rationale
4. Action items with timeline

Example

Input: "Help me with house flipper for a mid-size project."

Output: A complete house flipper framework tailored to the specific context, with actionable steps, relevant considerations, and measurable outcomes.

Edge Cases

• Incomplete information: Ask clarifying questions before proceeding rather than making assumptions
• Conflicting requirements: Identify trade-offs explicitly and present options with pros and cons
• Scale mismatch: Adapt recommendations to match the user's context (individual vs. team vs. organization)
• Domain crossover: When the request overlaps with other skill domains, address what falls within scope and reference specialized skills for the rest