Fix & Flip Due Diligence Checklist
Profitable flips are built on thorough due diligence. This checklist walks through every critical step — from initial comp analysis through the final draw request — so nothing falls through the cracks. Print it, bookmark it, and use it on every deal.
The analysis phase is where most deals are won or lost. Rushing to make an offer without solid numbers is the fastest way to lose money on a flip.
- Run comparable sales (comps) within a 0.5-mile radius and 6-month window to establish a realistic After Repair Value (ARV).
- Verify the neighborhood trend — are values appreciating, stable, or declining? Check days on market for recent sales.
- Drive the street and surrounding blocks at different times of day to assess noise, traffic, and overall curb appeal.
- Calculate your Maximum Allowable Offer (MAO) using the 70% rule: MAO = ARV × 0.70 − Rehab Costs.
- Confirm the property is zoned correctly and that the intended use (flip to owner-occupant, rental hold, etc.) is permitted.
- Check the tax assessment history and current property tax rate for the jurisdiction.
- Research any pending code violations, open permits, or municipal liens on the property.
- Identify whether the property is in a flood zone, historic district, or HOA — each adds cost and complexity.
The due diligence period is the investor's last chance to uncover hidden problems. Use every day of the study period — there is no such thing as too much information on a property.
- Schedule a professional home inspection covering roof, foundation, HVAC, electrical, plumbing, and structural systems.
- Walk the property with a licensed general contractor to build a detailed, line-item rehab budget.
- Order a title search to uncover liens, judgments, easements, or ownership disputes.
- Obtain a preliminary insurance quote for builder's risk or vacant-property coverage.
- Request a termite and pest inspection — wood-destroying insects are common in Virginia.
- Verify utility status: are water, electric, and gas active? Estimate reconnection costs if not.
- Confirm the scope of work aligns with what the ARV comps reflect — avoid over-improving for the neighborhood.
- If the property has a septic system or well, schedule specialized inspections for each.
- Review the HOA covenants (if applicable) for restrictions on exterior changes, rental caps, or approval timelines.
Closing day should be a formality if due diligence was done correctly. Double-check every number on the settlement statement and confirm insurance coverage is in place.
- Submit all required loan documentation to the lender well in advance of the closing date.
- Review the closing disclosure or HUD-1 settlement statement line by line for accuracy.
- Wire down payment and closing cost funds to the title company — never wire to an unverified account.
- Confirm that hazard insurance and builder's risk policies are bound and effective on the closing date.
- Perform a final walkthrough of the property to verify condition has not changed since inspection.
- Collect all keys, garage remotes, gate codes, and alarm system information at the closing table.
- Obtain copies of the recorded deed, title insurance policy, and all signed loan documents.
Active project management separates profitable flippers from those who lose money to budget overruns and extended timelines. Stay on top of the numbers and the schedule.
- Submit draw requests to the lender according to the agreed schedule — typically at 25%, 50%, 75%, and 100% completion.
- Conduct weekly site visits to monitor progress, quality, and adherence to the approved scope of work.
- Document every phase of the rehab with timestamped photos — lenders and future buyers may request these.
- Approve change orders in writing before any additional work begins, and update the budget accordingly.
- Collect lien waivers from the general contractor and all subcontractors with each draw payment.
- Schedule and pass all required building inspections (rough-in, framing, final) to close out permits.
- Begin marketing the property (photos, listing prep) before the final punch list is complete to minimize holding time.
- Track actual costs against the original budget weekly — catching overruns early prevents profit erosion.
Pro Tip: Build Your Checklist Into Your Process
The most successful investors do not rely on memory. They use a standardized checklist on every deal and refine it over time. Pair this checklist with the Rehab Budget Template, Property Inspection Checklist, and ARV Comp Analysis Worksheet for a complete due diligence system.
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