Solid Fix & Flip Opportunity — Would You Take This Deal in Today’s Market?

Question

Hey everyone,

I’m working on a potential fix & flip in Annapolis MD and wanted to run the numbers by the community — especially folks who’ve been active lately in this higher interest rate environment.

📍 Purchase Price: $210,000
🔨 Rehab Estimate: $60,000 (mostly cosmetic + roof)
📈 ARV: $340,000 conservatively (comps within 0.2 miles)
⏱️ Timeline: 4.5–5 months
📊 Exit Strategy: Traditional resale — possibly to a FHA buyer

I’ve flipped in this market before and built a great crew, so execution is pretty dialed in. Holding costs are tight, so speed and capital structure are crucial. Exploring a few flexible options here.

If this were your deal:

• Would you pull the trigger given current conditions?
• Would you bring in partners to move quicker?
• Are you seeing appetite for funding deals like this, or sitting on the sidelines for now?

Would you pull the trigger given current conditions?

Would you bring in partners to move quicker?

Are you seeing appetite for funding deals like this, or sitting on the sidelines for now?

Looking forward to hearing how others would structure it. Happy to answer questions about my due diligence too, always learning here.

Peter Mckernan · Answer

With current market conditions I would pad an extra 10% in there for gap between buying and ARV. For you that means $21,000. Can you do that? I would try because these days not only holding costs are high for longer time on the market, but inventory is high..

In my market, you need to buy something $500,000 one year ago with an ARV at least 650K or more. Now it is buy that for $450,000 with an ARV at least 650K.

Andy Sabisch · Answer

For cosmetics and a roof the $60K seems high and the timeline fairly long.  Does that include closing, doing the work, list, getting under contract and then closing?

Make sure the numbers work when you factor in the carrying costs for the loan, utilities, etc.  With the higher interest rates, that has been the downfall for a number of investors when the costs exceeded their budgets.  A solid HML will factor the costs in to make sure you and they are covered . . . if the company you are talking do is not doing that, consider looking elsewhere.

Not sure what bringing in a partner will do unless you are using that to eliminate the need for a HML.

As far as comps, how long were they on the market and were there price drops.  Make sure you factor that into your holding period as higher interest rates will kill profits in a heartbeat.

Good luck - just make sure the numbers work and remember, you make the money on the buy not the sell.

Erick Castellon · Answer

Great points here, and I completely agree — short-term capital definitely comes at a premium, but when used strategically, it can be a powerful tool.

What we’ve seen work really well is when investors use leverage to stay liquid and scale faster, especially when the loan covers 100% of rehab. Even with rates where they are now, the key is making sure the deal actually supports the cost of capital — and that there's a clear exit, whether it’s a flip or a refinance into something long-term like DSCR.

Also, lenders today are a lot more flexible than most people think — even first-timers have solid options if the numbers and the plan are strong.

Let me know if you want to brainstorm creative structuring — always happy to share what we're seeing work in real time.

Katie Smith · Answer

Hi Ellisa!

Are you mostly concerned about the higher interest rates on the rehab/fix & flip loan side? Totally understandable - those loans usually come with higher rates than conventional or DSCR loans since they’re short-term and built for value-add projects.

That said, they can still be a really smart move - especially if the deal pencils out and you’re confident in the after-repair value. Most fix & flip loans require just 10–15% down and will often cover 100% of the rehab, which helps you keep more cash available for your next deal.

Curious - how have you structured your previous projects? Have you worked with rehab loans before, or have you been using your own capital or partners?

And just a thought: if investors waited around for rates to drop, they’d miss out on opportunities - and they probably wouldn’t be true investors. The pros make the numbers work now and reposition or refinance later when rates shift.

If you'd like to talk through this deal or how to structure it to make sense in today’s market, I’d be more than happy to help. Messaging you now!