Note · Fix & flip
The holding-cost trap on a fix & flip
Most flips that miss do not miss on paint. They miss on the months the money sits.
Acquisition and rehab get the attention. Carry is what quietly eats the margin: interest, taxes, insurance, utilities, and the extra weeks after an inspection or a delayed draw.
Before you lock a purchase, write the hold as a real calendar — not a best-case close. Scope the work the way a contractor will bid it. Then add time for the things that always appear: permit, punch, and the week the buyer’s lender asks for one more item.
ARV only helps if the exit is real. Comparable sales should match the finished house you intend to deliver, not the nicest listing on the block.
We underwrite the asset and the sponsor’s track record on this product. Bring the scope as you wrote it. We will tell you on the first call whether the hold still works.
