Fix and flip is one of the fastest ways to build capital in real estate — but it's unforgiving of rookie mistakes. This guide walks a first-time flipper through the exact steps to fund and finish a profitable project.
Max purchase price = (ARV × 0.70) − rehab. Never buy a flip that breaks this rule without a strong reason — it's the guardrail that keeps most projects profitable.
First-time flippers typically use hard money (fix and flip loans) with 80–85% of purchase and 100% of rehab financed. Expect 15–20% down plus closing costs and a rehab reserve.
Break the scope into 4–6 draws (demo, rough-in, drywall, finishes, punch). Lenders inspect and release funds in 24–48 hours per draw.
Plan on 15–20% of purchase + closing costs (3–5%) + 6 months of interest reserves + 10% rehab cushion. On a $200K purchase / $50K rehab that's roughly $50–65K.
Most lenders require a licensed GC on your first 1–3 projects. After that, experienced investors can self-manage smaller rehabs.
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https://gelitecapital.com/resources/guides/fix-flip-beginners-guide