How to Know If a Fix and Flip Deal is Worth It
Not every distressed property is a diamond in the rough. Whether you’re a first-time flipper or a seasoned investor, knowing how to quickly evaluate if a deal is worth your time (and money) is essential to staying profitable and sane.
In this post, we’ll break down the key questions every investor should ask before moving forward with a fix and flip and how working with a smart lender like Barnett REI Finance can help you act quickly when a good deal comes your way.
1.Does the Deal Have Enough Profit Margin?
Your fix and flip success starts with the ARV (After Repair Value) and your projected costs. Most investors aim for a minimum 10%-20% profit margin, depending on the size of the deal and the local market.
Use this simple formula to sanity-check the numbers
ARV - (Purchase Price + Rehab Costs + Holding & Selling Costs) = Expected Profit
2. Are the Renovations Manageable?
Not all repairs are created equal. Major structural or foundation issues can quickly eat into profits and timelines. You want projects where:
The repairs are mostly cosmetic or easily scoped
You have reliable contractors ready to go
Permits (if needed) won’t take months to secure
Pro tip: Barnett REI Finance funds both the purchase and renovation of properties. Our draws are fast and flexible so you’re never stuck waiting for materials or contractors.
3. Is the Property in a Strong Market?
Even if the property is a great deal, location matters. Ask yourself:
Are homes in the area selling quickly?
What’s the buyer demand like?
Are the surrounding properties well-maintained?
Look for neighborhoods with recent comp sales, improving infrastructure, and limited inventory. A great house in the wrong location is a tough sell.
4. Can You Complete the Flip in a Reasonable Timeframe?
Holding costs (like insurance, utilities, taxes, and loan interest) add up fast. Every month you hold a property eats into your bottom line.
Make sure you can:
Start work quickly (avoid long waiting periods)
Finish in 2-6 months depending on the project size
List the home during a favorable selling season
The faster you flip, the stronger your returns.
5. Can You Get Reliable Financing
Cash Deals move fast, but tie up your capital. Traditional loans are slow and often inflexible. To make the most of good deals, you need a lender that’s both fast and experienced in fix-and-flips.
That’s where Barnett REI Finance comes in.
We specialize in nationwide fix-and-flip projects that help you:
Close in as little as a week
Fund renovations with fast draw releases
An in-house team that is always here to help
Final Takeaway
If the numbers make sense, the repairs are manageable, the location is strong, and you’ve got the right lender in your corner - it’s probably a flip worth doing.
Need funding for a potential deal?
Apply with Barnett REI Finance today and close with confidence.