Every experienced flipper remembers their first deal — and almost every one of them will tell you the same thing: the hardest part isn't swinging a hammer, it's getting the structure right before you ever make an offer. Financing, team, numbers, and deal evaluation all have to line up, or a promising property turns into a money pit. Here are the first five steps that put new investors in a position to find a good deal, fund it correctly, and actually make money on the exit.
Define your strategy and know your numbers
Before you look at a single listing, decide what kind of flip you're actually running. A light cosmetic rehab (paint, flooring, fixtures) behaves very differently than a full gut renovation or an addition — different timelines, different contractor needs, different risk.
Then learn the math every flipper uses to screen deals fast:
- ARV (After Repair Value): what the home will be worth once renovations are complete
- The 80% rule: in higher-cost California markets, many investors use 80% of ARV minus repair costs instead of the standard 70% — home values and margins run differently here, so a stricter national rule of thumb can screen out deals that actually work locally. Either way, it's a quick filter, not a guarantee of profit
- All-in cost: purchase price + rehab budget + holding costs + financing costs + selling costs
Most new investors underestimate the last category. Holding costs and selling costs can quietly eat 8–10% of your ARV before you've accounted for a single repair. Build a real budget that includes all of it, not just the purchase price and the renovation line item.
Build your core team before you need it
The investors who move fastest on good deals already have their team assembled. Waiting until you're under contract to find a contractor or a title company is how good deals slip away. At minimum, line up:
- A licensed, insured general contractor with flip experience, not just remodel experience
- A real estate agent who works with investors and understands ARV, off-market deals, and quick-close transactions
- A title or escrow company comfortable with investor transactions and private financing
- An insurance broker familiar with builder's risk and vacant-property policies, since a standard homeowner's policy won't cover a property mid-renovation
- A hard money or private lender who understands business-purpose, investor-focused loans — more on choosing one in Step 3
- A real estate attorney or CPA, especially if you're structuring the purchase through an LLC
Having these relationships in place before you find a property means you can move on day one instead of scrambling for week two.
Get pre-qualified with a hard money lender
Most fix and flip deals aren't funded with a conventional mortgage. Banks are slow, they don't lend on distressed property, and they rarely finance renovation costs. That's where private, or "hard money," lenders come in — loans secured by the property itself and underwritten around the deal, not your W-2 income.
Getting pre-qualified before you're under contract tells you your real purchase power and makes your offers stronger. Sellers and listing agents take cash-equivalent, pre-qualified buyers more seriously than buyers who are "still figuring out financing."
When you're comparing lenders, ask direct questions:
- How is the property valued — appraisal, or an internal valuation process?
- How fast can you actually close, and how fast is the initial loan review?
- Is the rehab budget funded as part of the loan, and how are draws handled?
- Does the lender require a licensed general contractor, or will they work with an owner-builder managing the project directly?
- Are there prepayment penalties if you sell or refinance early?
- Will the lender show you their underwriting, including both current value and projected ARV?
That last point matters more than most new investors realize. A lender's internal numbers are an independent gut-check on your own assumptions. At Lantzman Lending, every fix and flip loan quote includes our underwriting view of current value and after-repair value, so you're not relying on your own assumptions alone.
We're a direct private lender across California and Nevada — including hard money lending in San Diego — with active lending in Arizona, Washington, Oregon, Idaho, Texas, and Hawaii, funding both the purchase and renovation costs so investors aren't piecing together separate construction financing.
We also don't require a licensed general contractor on every project. Experienced owner-builders managing their own renovation can qualify, with fund-controlled draws paid directly to the borrower — not to a contractor or fund control company — so you pay your subs, laborers, or yourself as the work gets done. It's fast, fee-free fund control built around how owner-builders actually run a project.
Learn to evaluate a deal like a lender does
Once your financing and team are in place, you can start actually looking at properties — and this is where new investors lose the most money. A property that looks like a deal on paper can hide problems that erase your margin.
Why is this property still on the market?
In competitive coastal and West Coast markets, well-priced properties with real upside don't sit for long. If a listing has been active for a while, find out why — title issues, deferred maintenance the photos don't show, an unrealistic asking price, or a structural problem that's scared off other buyers. Sometimes the answer is a genuine opportunity. Sometimes it's a warning sign.
It's worth noting that an investor's read on a fixer-upper is different from an owner-occupant's. Redfin's breakdown of the pros and cons of buying a fixer-upper is written for homebuyers weighing character and personalization against renovation stress — a flipper has to set that emotional calculus aside and underwrite the property purely on numbers and exit timeline.
From there, build a true cost picture, not just a purchase-and-sale number:
- Repair and renovation costs, with a contingency (most experienced flippers budget 10–15% over the contractor's estimate)
- Insurance during construction
- Escrow, title, and closing costs on both ends of the deal
- Loan interest and fees for the full estimated hold period
- Permit and inspection costs, if the scope requires them
A property that "pencils" on purchase price alone often doesn't pencil once every cost is on the table. This is also where a second opinion from your lender's underwriting is useful — comparing your estimate of ARV against an independent valuation can catch an overly optimistic projection before you're under contract.
Run the final numbers and make a disciplined offer
Before you submit an offer, run your numbers one more time, all the way through to the exit:
- Total acquisition cost
- Total renovation budget (with contingency)
- Total holding costs for your realistic timeline, not your best-case timeline
- Total selling costs
- Your target profit margin
If the deal still works after that full accounting, you have a real offer to make — not a guess. If it doesn't, walking away is the discipline that separates investors who build a track record from those who burn out on their first project.
The deals that look best in a quick mental calculation are often the ones that fall apart under a full cost breakdown. The investors who do this math every time, before every offer, are the ones who are still flipping five years from now.
Why first-time flippers work with Lantzman Lending
Your first deal carries the most risk and the steepest learning curve. Many private lenders are built around speed alone and treat a first-timer the same as a repeat investor with twenty closings behind them — same process, same paperwork, no context. We do it differently.
You talk to the decision maker
No call center, no loan officer relaying questions to an underwriting team you never speak with. First-time borrowers get direct access to the people who actually approve the loan, so questions get answered in real time, not in a queue.
We show you the numbers, not just a rate
Every quote includes our view of current value and ARV, explained in plain terms. If a deal looks thin, we'll tell you before you're under contract — not after you've put down earnest money.
Draws are handled in-house
Many lenders route renovation draws through a third-party fund control company, adding setup fees and delays for borrowers who've never managed a draw schedule before. Ours is managed in-house, which keeps the process faster and easier to follow on your first project.
Flexible underwriting on your first flip
We underwrite around the property and the plan, not a track record of past flips. A well-structured first deal with a solid team behind it gets evaluated on its own merits.
Ready to move on your next deal?
Getting your strategy, team, and financing in place before you start shopping for properties is what separates investors who close confidently from those who lose deals to slower buyers. Lantzman Lending can walk you through what a loan quote looks like, including our underwriting on current value and ARV, so you know exactly what you're working with before you make an offer.
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