Fix and Flip
Holding Costs: The Silent Flip Killer
Flipping is a math business wearing a construction costume. Here is the part of the math this topic covers.
Fix and Flip
The short version, then the substance.
Key Takeaways
- What counts as holding cost
- The math of speed
- Budget them like a line item
What counts as holding cost. Loan interest, property taxes, insurance, utilities, lawn care, and HOA dues, every month from closing to resale. On a typical project this runs four figures monthly. It is the meter that never stops running.
The math of speed. A flip that earns $40,000 in four months and one that earns $40,000 in nine months are not the same deal. The second one quietly handed five months of holding costs back. Compressing the timeline is the cheapest profit improvement available.
Budget them like a line item. Put a per-month carry number in the spreadsheet and multiply by a realistic timeline plus one buffer month. If the deal only works with zero buffer, the deal is telling you it is too thin.
The South Texas angle. Averlend underwrites this every week in San Antonio and across Bexar County. If you are working a deal in Alamo Heights or anywhere else in the metro, the theory above comes with a local desk attached: see our San Antonio lending page or send the deal directly.
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