The best flip deals come from motivated sellers — probate, divorce, pre-foreclosure, estate sales, absentee owners. Lead sources: MLS distressed listings, direct mail, driving for dollars, wholesalers, auction platforms. You don't need an off-market deal to make money. Many profitable flips come straight off the MLS at the right price.
Every deal starts with ARV. Pull comps, estimate rehab, calculate MAO (70% of ARV minus rehab). Model full net profit including all closing costs, carrying costs, and financing. Never make an offer without running the full analysis.
Hard money is the most common flip funding source. Rates run 10–13%, 2–4 points, 6–12 month terms. Many hard money lenders cover both purchase and rehab draws. Private money from individuals runs cheaper but takes longer to source. DSCR and conventional loans don't work for flips — too slow, wrong terms.
Scope the full job before you close. Use licensed contractors for permitted work. Pay on completion milestones, not upfront. Inspect every stage. The biggest profit killers are scope creep and contractor delays — both are manageable with clear contracts and active project management.
List 2–3 weeks before rehab completion so you're active the day you're done. Price at or slightly below comparable renovated sales to move fast. Every extra month of carrying costs is $3k–$6k out of your pocket.
Dan White is a licensed Virginia real estate agent at Pearson Smith Realty and founder of FreeDealCalc.com. He has been flipping houses in Northern Virginia for over 20 years and built FreeDealCalc to help investors analyze deals faster.