Process of flipping homes - Guide. Let me help you do this right. Wes Stolsek, OMNI Homes International, 520-404-9773.

Quick plan to buy → renovate → sell (house flipping) — step-by-step + realistic cost ranges

Nice — flipping can be very profitable when done methodically. Below is a practical, buyer-to-exit roadmap plus a detailed renovation cost breakdown (light / mid / heavy rehab for a ~1,500 sq ft house) and concrete ways Wes Stolsek at OMNI Homes International can help your client at every step.

1) Step-by-step process (high level)

1. Investment criteria & goals

   • Decide target neighborhoods, target property types (ARV target, required cap/ROI), acceptable timelines, and max cash/loan exposure.

2. Deal sourcing

   • Off-market leads, MLS (use agent network), auctions, REOs, wholesalers, direct-to-owner marketing.

3. Initial analysis / quick numbers

   • Estimate ARV (after-repair value) using comps.

   • Use the 70% rule as a quick screen: Max purchase price ≈ 70% × ARV − estimated rehab − holding/selling costs (adjust for local market).

4. Property inspection & due diligence

   • Build a scope of work (SOW) from an inspector/contractor: structural, roof, HVAC, electrical, plumbing, hazardous materials.

5. Firm budget & financing

   • Get contractor bids, permit cost estimates, loan commitment (hard-money, rehab loan, cash).

6. Make offer with contingencies

   • Include inspection & financing timelines. Consider earnest money sized to be competitive but protectable.

7. Close & mobilize

   • Order permits, hire contractor(s), demo, and start work.

8. Project management

   • Weekly progress, change-order control, invoice and draw tracking, contingency use.

9. Pre-sale preparation

   • Final clean, staging, professional photos, market pricing strategy.

10. Sell

11. List with agent experienced in investor flips (fast closings, marketing to buyers).

12. Post-sale

13. Reconcile final P&L, pay loan/fees, calculate taxes (consult CPA), consider 1031 exchange if reinvesting.

2) Typical renovation cost breakdown (for a ~1,500 sq ft home)

Below are realistic whole-project price ranges for common line items. These are national average ranges — local labor/materials vary.

Per-item ranges (light / mid / heavy rehab)

• Roof replacement: $5,000 / $8,000 / $14,000

• HVAC (replace): $4,000 / $6,000 / $9,000

• Flooring (hardwood/LVP/tile): $3,000 / $7,000 / $12,000

• Windows (replace some or all): $3,000 / $6,000 / $12,000

• Interior paint (whole house): $1,500 / $3,000 / $5,000

• Exterior paint: $1,500 / $3,000 / $6,000

• Kitchen (cabinets/counters/appliances): $8,000 / $18,000 / $45,000

• Bathrooms (total all baths): $4,000 / $9,000 / $20,000

• Plumbing / electrical upgrades: $2,000 / $6,000 / $15,000

• Permits: $500 / $1,200 / $3,000

• Demo & cleanup: $800 / $2,000 / $5,000

• Cabinets & countertops (separate if needed): $2,000 / $8,000 / $20,000

• Fixtures & finishes (lighting, plumbing fixtures): $1,500 / $4,000 / $8,000

• Landscaping / curb appeal: $500 / $2,000 / $6,000

• Misc / punch list: $1,000 / $3,000 / $7,000

Subtotals & totals (example totals calculated for a 1,500 sq ft home):

• Light rehab subtotal ≈ $38,300 → contingency (10%) + holding → ≈ $45,130 total rehab budget

• Mid rehab subtotal ≈ $86,200 → contingency (15%) + holding → ≈ $105,130 total rehab budget

• Heavy rehab subtotal ≈ $187,000 → contingency (20%) + holding → ≈ $234,400 total rehab budget

(“Holding” above means mortgage/insurance/utilities/etc. while owning and a modest buffer; contingency is project risk reserve.)

3) Example profit illustration (mid-range flip)

• Buy price: $200,000

• Mid rehab budget (from above): $105,130

• ARV (comps after rehab): $420,000 (example)

• Selling commission (6% ARV): $25,200

• Misc closing costs: $2,000→ Estimated pre-tax profit ≈ $87,670(ARV − buy − rehab − selling costs − other closing ≈ $87,670)

Notes: taxes, financing interest/points, and unexpected change orders reduce net profit. Always model a conservative ARV and include 10–20% contingency.

4) Financing options & costs to model

• All-cash — fastest, lowest total cost, more competition.

• Hard-money loans — fast underwriting for investors; higher interest (8–14%), origination points (1–3), often interest-only during rehab; plan for fees.

• FHA 203(k) / renovation mortgages — for owner-occupant rehab projects (longer approval).

• Home equity line (HELOC) — cheaper interest but uses borrower’s credit/collateral.

• Private money / partners — flexible but negotiate splits/returns.

Model financing interest monthly: if using hard-money at 10% annual for 6 months on $150k rehab+purchase, interest = (150,000 × 0.10 × 0.5) = $7,500 (approx). Always include interest & loan fees in holding costs.

5) Permits, inspections, legal & tax

• Permits: structural, electrical, plumbing, HVAC — get them. Unpermitted work kills sales and value.

• Inspections: pre-purchase whole-house inspection, termite, sewer scope, specialized inspections (roof, foundation) as needed.

• Taxes: flipping is usually taxed as ordinary income in many jurisdictions, not long-term capital gains — consult a CPA. Consider 1031 exchanges only for rental-to-rental (not for flips); flips typically don’t qualify.

• Insurance & licenses: ensure contractor licensing and carry COIs (insurance).

6) Project management best practices

• Get 3 bids per major trade (roof, HVAC, kitchen).

• Use fixed-price contracts where possible; avoid open hourly surprises.

• Track draws/payments against milestones and retain a final 5–10% until punch list is done.

• Keep photos & change-order log.

• Have stop-loss criteria and exits (pull the plug vs. finish and rent).

7) How Wes Stolsek at OMNI Homes International can help this client

Wes (as an experienced Realtor at OMNI Homes International) can provide investor-specific, practical assistance:

• Deal sourcing & MLS access: find on-market and off-market properties, set up targeted searches, and send pocket listings.

• Accurate comps & ARV modeling: produce investor-grade comp reports and pricing strategies to justify ARV.

• Negotiation expertise: structure offers with investor-friendly inspection/closing terms and seller concessions.

• Referrals & network: trusted contractors, structural engineers, inspectors, lenders (hard-money and rehab lenders), title companies, and CPAs with investor experience.

• Project coordination: connect you to vetted general contractors, provide referrals for project managers or oversee contractor selection.

• Staging & marketing for resale: staging strategies, pro photography, pricing cadence, and marketing to maximize speed and price.

• Investor services: assist with 1031 exchange timing referrals, cash-flow modeling, and introductions to potential private lenders or JV partners.

• Speed to close: meaningful for flips — Wes can coordinate quick closings with OMNI’s resources.

• Post-sale documentation: help with final reconciliation (sellers disclosures, final MLS paperwork), and track sale metrics you’ll want for the next deal.

8) Practical tips to improve profit margins

• Focus on high ROI projects: kitchens, baths, paint, flooring, and curb appeal. Avoid over-improving for the neighborhood.

• Keep turnaround time short — holding costs erode margins.

• Use standardized scopes & unit pricing so you can quickly price future flips.

• Build vendor relationships for volume discounts and faster timelines.

• Pre-market to investor buyers if needed (cash buyers) for a faster exit.

9) Deliverables I can provide right now (no waiting)

I’ve included sample numbers above. If you want, I can immediately produce:

• a downloadable rehab budget spreadsheet (line items + contingency + holding + profit calculation), or

• a scope-of-work template and contractor comparison sheet, or

• a sample ARV/comps worksheet tailored to a specific zip code/property (I’ll need the address/zip/bed-bath-sqft / current condition).