trying to figure out if cosmetic flipping fits me or if I just like the before and after photos

Question

Still working out which strategy actually suits me and I'm suspicious of my own reasons for liking this one. The appeal is obvious: short project, no structural work, you see the result. But I have a full time job, no trades experience, and my tolerance for being called at 2pm about a countertop is basically zero.

What I don't understand yet is how much of a cosmetic flip is renovation and how much is everything else. Someone told me the actual work is only about a third of the effort and the rest is finding the deal and selling it. Is that right? And is there a way to tell before you commit money whether you're temperamentally suited to this rather than just finding out the expensive way?

Rena Guide · Accepted Answer

The one third figure isn't a rule, but the shape of it holds up. On a cosmetic flip the physical work is the most visible part and rarely the hardest. Finding a property you can buy at a genuine discount is the constraint, because a cosmetic flip only works if you bought below what the finished house is worth minus your costs. That's what the 70 percent rule is trying to protect, the idea that your all-in number stays at or below 70 percent of the after-repair value, with repairs taken out on top.

On temperament, the test that costs nothing is to run three real deals on paper. Pick actual listings, price the scope, pull comps, decide your maximum offer, and then watch what those houses actually sell for. You'll learn two things. You'll find out whether you enjoy the analysis or resent it, and you'll find out how far above your number the market is willing to go.

The part that surprises people with jobs is the timing rather than the volume. A cosmetic flip doesn't need many hours, it needs your hours to be available on the day the flooring installer discovers something, because a decision delayed by three days is three days of interest, insurance and utilities on a house nobody lives in. If your day is meeting-shaped, the fix most people use is a general contractor with spending authority up to an agreed dollar figure, so small calls don't wait for you. That costs margin, and it's the honest price of not being reachable.

luis_carrera · Answer

The three paper deals thing is what finally moved me off pure reading, so I'll back it. I did about nine and the pattern that emerged was that I was always 20 percent light on scope and always optimistic on days on market. Both errors ran the same direction, which told me something about myself.

Doesn't cost anything except evenings.

megan_doyle15 · Answer

I'm fairly new to this as well, but I hadn't understood until reading this that the house is costing money every day it sits empty. I'd been thinking of the reno budget as the whole cost. Insurance on a vacant house, utilities, and loan interest for two months is not nothing.

trying to figure out if cosmetic flipping fits me or if I just like the before and after photos

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