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?

---

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

---

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.

---

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 |