How to Flip Properties
By FlipProperties Editorial TeamPublished October 14, 2026Updated October 14, 2026PropStream figures checked October 2026
Flipping properties means buying a home below market value, adding value through repairs or a better sale, and reselling it within months for a profit. Most flippers set their maximum offer with the 70% rule: 70% of the after-repair value (ARV), minus repair costs. The profit is made when you buy, so finding the right property at the right price matters most.
House flipping by the numbers
ATTOM tracks every U.S. home resold within 12 months of purchase. Its second-quarter 2026 report:
77,991
homes flipped in Q2 2026
6.2%
of all home sales were flips
$60,526
typical gross profit per flip
161 days
typical time to flip
Gross profit is resale price minus purchase price, before repairs, holding and selling costs. The typical gross margin was 21.5%. Source: ATTOM Q2 2026 Home Flipping Report, published October 1, 2026.
Types of property flipping
| Strategy | How it works | Best for |
|---|---|---|
| Fix-and-flip | Buy a distressed or dated home, renovate it, and sell at full market value. | Investors with repair budgets and contractor access. |
| Wholetail | Buy below market, do light cleanup or cosmetic work, and sell close to as-is. | Homes that need little work but were bought at a discount. |
| Wholesaling | Put a property under contract, then assign the contract to another investor for a fee before closing. | Investors with little capital who are strong at finding deals. |
| Appreciation flip | Buy in a rising market and resell with little or no renovation. | Experienced investors; it depends on prices rising, which is the riskiest bet. |
Wholesaling rules vary by state. Some states require disclosures or a real estate license to market a contract you don't own, so check your state's rules first.
How to flip a property in 7 steps
- 01
Pick a market and a strategy. Choose an area you can reach and price-check, and decide whether you will fix-and-flip, wholetail or wholesale. Your strategy sets your budget and timeline.
- 02
Line up financing. Know how you will pay before you make offers: cash, a hard money loan, private money or a partner. Sellers in a hurry favor buyers who can close fast.
- 03
Find motivated sellers. The best flips are usually bought off-market from owners who need to sell: pre-foreclosures, vacant homes, inherited properties, tired landlords. Build lists from public records instead of competing on the MLS.
- 04
Run comps and set the ARV. Find renovated homes that sold nearby in the last few months to estimate the after-repair value (ARV).
- 05
Calculate your maximum offer. Use the 70% rule as a starting point: ARV × 0.70 − repairs. Adjust for your market and your costs.
- 06
Estimate repairs and build the budget. Walk the property, get contractor bids, check permit needs, and add a contingency reserve for surprises.
- 07
Renovate, list and sell. Every month you hold costs interest, taxes, insurance and utilities, so keep the schedule tight and price to sell.
The 70% rule, with an example
The 70% rule says a flipper should pay no more than 70% of a property's after-repair value, minus repair costs. The 30% left over has to cover buying costs, holding costs, selling costs and your profit.
Formula
Maximum offer = (ARV × 0.70) − repair costs
Worked example
| Item | Amount |
|---|---|
| After-repair value (ARV) | $250,000 |
| 70% of ARV | $175,000 |
| Estimated repairs | −$35,000 |
| Maximum offer | $140,000 |
The 70% rule is a starting point, not a law. In expensive or fast-moving markets, investors often go above 70%; on bigger rehabs or slower markets, below. Run your own numbers in our MAO calculator.
What flipping really costs
| Cost | What it includes |
|---|---|
| Buying costs | Closing costs, title, inspection, and loan fees or points if financed. |
| Repairs | Materials, labor, permits, and a contingency reserve. |
| Holding costs | Loan interest, property taxes, insurance and utilities for every month you own it. |
| Selling costs | Agent commissions, closing costs and any seller concessions. Commissions are negotiable and vary by market. |
| Taxes | Profit on a property held one year or less is a short-term capital gain, taxed as ordinary income. |
Source for the tax rule: IRS Topic No. 409, Capital Gains and Losses. Investors who flip often may be treated as dealers, which changes how profits are taxed. Talk to a CPA before your first deal.
The biggest risks
Paying too much. If the purchase price is wrong, no renovation fixes it. Comps and the 70% rule exist to prevent this.
Repair overruns. Hidden structural, electrical, plumbing or foundation problems can erase the margin. Inspect first and keep a reserve.
Holding longer than planned. The typical flip took 161 days in Q2 2026 (ATTOM). Every extra month adds interest, taxes and insurance.
Market shifts. Prices or buyer demand can soften between the day you buy and the day you list.
How to finance a flip
| Option | How it works | Trade-off |
|---|---|---|
| Cash | Pay for the purchase and repairs yourself. | Fastest close and no interest, but your money is tied up until the sale. |
| Hard money loan | A short-term loan from a private lender, based mainly on the property and its ARV. | Quick to arrange; higher rates and fees than a bank loan. |
| Private money | A loan from an individual you know, on terms you negotiate. | Flexible, but the relationship is on the line if the deal goes wrong. |
| Partner or joint venture | One partner brings the money, the other finds and runs the deal; profit is split. | Lets you start with little capital; put the split in writing. |
| Home equity (HELOC or cash-out refinance) | Borrow against a home you already own. | Lower rates, but your own home secures the loan. |
Sellers in a hurry favor buyers who can close quickly, so know your financing before you make offers.
Where flippers find properties
The best flips are rarely on the MLS. They come from owners with a reason to sell fast, found through public records before the home is listed. Each guide below shows how to build that list.
Pre-foreclosures
Owners behind on payments, with a deadline.
Vacant properties
Empty homes cost owners money every month.
Inherited properties
Heirs who often want to sell, not manage.
High equity
Room to offer a discount and still pay the owner.
Absentee owners
Owners who don't live in the home.
Tired landlords
Long-time rental owners ready to get out.
Tax liens
Owners behind on property taxes.
Expired listings
Homes that failed to sell on the MLS.
Auction properties
Homes scheduled for foreclosure auction.
See all 24 lead-category guides →
Most flippers stack two or three signals, like vacant plus high equity, to get a shorter list of likelier sellers.
Skip the filters — try this in PropStream AI Search
Paste this into AI Search and swap in your market:
“Find vacant single-family homes in [City, ST] with at least 50% equity, owned more than 10 years.”
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Flipping properties: common questions
Flipping a property means buying it below market value, adding value through repairs or a better sale, and reselling it within months for a profit. ATTOM counts a home as flipped when it is resold within 12 months of purchase.
The 70% rule says to pay no more than 70% of a home's after-repair value (ARV), minus repair costs. For a home with a $250,000 ARV and $35,000 in repairs, the maximum offer is $140,000. It is a starting point; investors adjust the percentage for their market.
You need enough to cover the purchase, repairs, holding costs, selling costs and a reserve for surprises, either from cash or financing. Many flippers use hard money loans, private money or a partner.
The typical home flipped in Q2 2026 took 161 days from purchase to resale, according to ATTOM. Timelines depend on the size of the rehab, permits and how fast the home sells.
The typical gross profit on a flip was $60,526 in Q2 2026, a 21.5% gross margin, according to ATTOM. Gross profit is resale price minus purchase price, so repairs, holding and selling costs still come out of it.
Profit on a property held one year or less is a short-term capital gain, taxed as ordinary income, per the IRS. Investors who flip often may be treated as dealers, which changes the tax treatment, so talk to a CPA before your first deal.
A flipper buys the property, improves it and resells it. A wholesaler puts the property under contract and assigns that contract to another investor for a fee, without buying or renovating it. Wholesaling rules vary by state.
Most flippers find deals off-market, from owners with a reason to sell: pre-foreclosures, vacant homes, inherited properties, tax liens and tired landlords. Investors build these lists from public records with data tools like PropStream.
No. FlipProperties.com is an independent education site. We don't buy, sell or list properties, and we don't give legal, tax or financial advice. We show investors how to find motivated sellers with PropStream, and we're a PropStream affiliate.
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