A successful fix & flip starts well before the renovation. In my opinion, one of the biggest decisions is simply choosing the right property in the first place.

A low purchase price by itself doesn't make something a good flip.

When looking at a potential property, I think several things have to work together:

Location and market demand — Is there actual buyer demand in that neighborhood and price range?

Property type and buyer fit — Is this the type, size, layout, and price point buyers in that particular market are actually looking for?

Purchase price and project economics — After purchase, renovation, financing, holding costs, selling expenses, and contingencies, is there still enough margin to justify the project?

Condition and repair exposure — Cosmetic work is one thing. Roofs, foundations, electrical, plumbing, HVAC, structural problems, and hidden conditions can change the economics quickly.

ARV — Is the projected resale value supported by recent, relevant comparable sales, or are we using the ARV the deal needs in order to work?

Capital requirements — Before committing to the purchase, do you know how the acquisition, rehab, carrying costs, reserves, and unexpected expenses will be funded?

Local knowledge — Good local contractors, agents, and other professionals can sometimes identify problems with an assumption that aren't obvious from a spreadsheet.

The way I look at it, a strong acquisition shouldn't require the renovation, financing, or resale market to rescue weak underlying numbers.

For those of you actively doing fix & flips:

What is the first thing that will make you walk away from an otherwise interesting property — location, repair exposure, questionable ARV, purchase price, or something else?