Three things made flipping harder over the past two years: higher hard money rates (11–13% vs. 9–11%), higher rehab costs due to sustained materials and labor inflation, and in some markets a pullback in retail buyer demand as affordability was squeezed by high rates. All three compress margins on deals that would have worked easily in 2021.
Life event sellers still exist in every market, every month. Distressed properties still exist. The fundamental math — buy distressed below market, renovate to retail standard, sell to an end buyer — still works when you buy right. The investors who are struggling are the ones who didn't adjust their MAO to account for higher costs. The investors who are succeeding tightened their acquisition standards and extended their minimum profit threshold.
ATTOM Data's flip reports show gross margins have compressed from peak levels but remain positive for experienced operators. Average gross flip profit nationally is in the $60,000–$75,000 range on completed projects in 2025–2026 data. Net profit after all costs is lower — experienced investors targeting $40,000–$60,000 net on mid-price flips are achieving it in most markets.
Experienced operators with established contractor relationships, private or portfolio money at lower rates than hard money, and deep market knowledge of their specific submarkets. They're not chasing deals — they're waiting for deals that hit their numbers. Volume is lower than 2021 but quality is higher. They're doing 6–10 deals/year instead of 12–15 and making similar or better net income.
Dan White is a licensed Virginia real estate agent at Pearson Smith Realty and founder of FreeDealCalc.com. He has been investing in real estate for 20+ years.