I drove around Philadelphia yesterday looking at houses.
Not casually. Like, actually looking — pulling up Zillow, writing down addresses, peeking through windows like a total creep. The kind of afternoon where you convince yourself you’re being productive and then get home and realize you have absolutely no idea what to do next.
Because here’s the thing nobody tells you: finding the house is the easy part.
It’s everything that comes after that turns your brain into soup.
So I’m writing this for anyone who’s been in that same driveway, staring at a house going “okay but… now what?” Here’s the full process, step by step — from “I found a house” to “I just made money on it.”
Step 1: Before You Fall in Love — Run the Numbers
I cannot stress this enough. Do not get emotionally attached to a house before you know if the deal works.
The first thing you need to figure out is ARV — After Repair Value. What will this house be worth after you fix it up? Look at comparable sales (comps) in the same neighborhood — similar size, similar condition, sold in the last 3-6 months.
Then work backwards:
The 70% Rule: Maximum offer = (ARV × 70%) minus estimated repair costs
So if ARV is $200K and repairs are $30K: ($200K × 0.70) – $30K = $110K max offer
If the asking price is way above that? Walk away. The deal doesn’t work.
🔧 Run your numbers here: [ARV Calculator] — figure out what the house is worth after repairs [Philadelphia Comps Analyzer] — pull comparable sales to back up your ARV [Philly Flip Profit Calculator] — see your full profit picture before you make a move
Step 2: Walk the House Like an Investor, Not a Buyer
When you tour the house, you’re not looking at whether you like the kitchen. You’re looking at how much everything is going to cost.
The big ticket items that can kill a flip:
- Roof — replacement runs $8K–$20K+
- HVAC — $5K–$15K
- Electrical — especially in older Philly rowhouses, knob-and-tube wiring is a nightmare
- Foundation — if there are cracks, run
- Plumbing — cast iron pipes in older homes can be expensive
Write everything down. Every crack, every stain, every door that doesn’t close right.
🔧 Use this while you walk: [Flip Due Diligence Checklist] — check off issues as you find them, costs add up automatically
Step 3: Figure Out Your Money
Okay so you love the deal. Now — how are you actually buying this thing?
Most flippers aren’t using their own cash. The most common options:
Hard Money Loan — short term, higher interest, but fast and flexible. They lend based on the deal, not just your income. Great for flips because you’re in and out quickly.
Private Money — a person (friend, family, investor) lends you the money privately. More flexible terms, relationship-based.
Partnership — someone brings the money, you bring the deal and do the work. Split the profit.
Know your numbers before you talk to a lender. They’re going to ask.
🔧 Run your financing numbers: [Hard Money Loan Calculator] — see your real borrowing costs including points, interest, and fees
Step 4: Make the Offer
This is where a good investor-friendly real estate agent is worth their weight in gold. You want someone who understands flip math, not just someone who sells family homes.
When you make the offer:
- Base it on your 70% rule calculation, not emotion
- Include an inspection contingency — this lets you back out if the inspection reveals something catastrophic
- “As-is” offers are more attractive to sellers but riskier for you as a first-timer
- Be prepared to negotiate after inspection
Step 5: Get the Inspection — Then Renegotiate
Hire a licensed home inspector ($300–$500). This is not optional.
Their report will show you everything wrong with the house. Use it to:
- Update your repair cost estimates
- Go back to the seller and ask for a price reduction
- Or walk away if the numbers no longer work
Run your flip profit numbers again with the updated repair costs.
🔧 Recalculate after inspection: [Philly Flip Profit Calculator] — plug in your updated numbers and see if the deal still works
Step 6: Close, Renovate, Sell
Once you close, the clock starts ticking — especially if you have a hard money loan charging you interest every month.
Move fast on renovations. Get your GC (General Contractor) lined up before you close if possible. Get 3 quotes minimum. Don’t hire the cheapest one — hire the one with references and a track record.
Common flip renovations in Philadelphia:
- Kitchen and bathrooms sell houses
- Fresh paint throughout — always
- New flooring
- Curb appeal — first impressions matter
Price it right when you list. Check comps again. Don’t get greedy on the exit price.
🔧 Final profit check before you list: [Philly Flip Profit Calculator] — one more time, with all final costs plugged in
The Honest Truth
Yesterday’s drive taught me something. The houses are out there. The deals exist. But this process has a lot of moving parts — and the people who make money on flips are the ones who know their numbers cold before they ever make an offer.
I’m still learning. I’m still figuring this out. But every house I look at is a lesson, and every lesson gets me closer to actually doing this.
If you’re at the same stage I am — curious, a little overwhelmed, driving around neighborhoods with Zillow open — I hope this helped.
Now go run your numbers.