Flip (Buy, Rehab, Sell)
Buy a distressed property, renovate it, and sell for a profit.
Flipping is a short-term strategy focused on one-time profit rather than ongoing income. You buy below market, renovate to retail buyer standards (higher finish than rentals), and sell at full market value. Profits are taxed as ordinary income (or self-employment if you're classified as a dealer), which is a significant disadvantage compared to BRRRR's long-term capital gains treatment.
Profit = Sale Price - Cost Basis - Selling Costs (agent commissions, transfer tax, etc.) ROI = Profit / Total Cash Invested
When you select Flip mode, Kaison evaluates profit margin, ROI, and hold time rather than rent and DSCR. The scoring rubric replaces DSCR with Profit Margin (target: ≥20% of ARV for a 20/20 score).
Buy at $150K, rehab for $50K, carry for $12K, closing costs $8K. All-in: $220K. Sell at $285K. Agent commission: $17.1K (6%). Net profit: $47.9K. ROI: 21.8%. Kaison rates this as GO with a strong profit margin.
Most new investors flip first to build capital, then BRRRR to build wealth. Flipping is a job (you trade time for money). BRRRR is investing (your money works while you sleep). Kaison helps you analyze both so you can make the strategic choice.
BRRRR (Buy, Rehab, Rent, Refinance, Repeat)
A strategy to build a rental portfolio by recycling capital through refinancing.
Cost Basis (All-In Cost)
Total money invested in a property: purchase + rehab + carry + closing.
Return on Investment (ROI)
Total return (including equity) as a percentage of total investment.
Educational content only. Consult a CPA or attorney for advice specific to your situation.