Flipping in 2025: Are Smaller, Cosmetic Rehabs Beating Full Gut Jobs This Year?

[Andy Gonzales]

Hey everyone,

I’ve been noticing more investors shifting toward lighter cosmetic rehabs instead of full gut flips this year — especially as labor costs and permit timelines stay unpredictable.

Some markets (like the Midwest and Southeast) are seeing price rebounds on entry-level homes, so smaller updates and faster turns seem to be making more sense for some investors.

Curious what you all are seeing:

• Are you adjusting your strategy toward smaller, faster rehabs?

• How are you handling tighter spreads with higher materials and labor costs?

• Anyone still going after full remodels and making it work in this market?

Would love to hear what’s working (and what’s not) for everyone right now — especially for those actively flipping in 2025.

[Dan H.]

Small improvements equates to small value adds.   With the holding costs, selling costs, and the current unpredictable appreciation market.

@Andy Gonzales seeing you are in poway you will be familiar with the location, last year I added a half bathroom out of existing space in a little unit in mission beach 4 houses from the ocean boardwalk. The comps showed this half bathroom raised the value ~$50k. That is a value add. The after ARV PSF was over $2k.

Would a cosmetic rehab covered holding and selling costs (I kept the property so no selling costs)?

It is my belief that your best chance of producing a good return on the value add is to go big on things that add value.   In that little unit, I removed 5 walls and added 2 walls.   I moved a sewer vent pipe to be in a wall instead of having a bump out.  New kitchen, new full bathroom, added half bathroom, new eyebrow porch, new flooring, new paint.

What if you did a light value add that projected a value increase enough to cover holding and selling costs, but the market depreciates a little?   There goes that micro profit that was projected.

good luck