# Fix and Flip

*Real Estate — Finicade finance glossary*

Fix and flip is buying a property, renovating it and reselling quickly for profit. The margin is consumed by four things people underestimate: transaction costs at both ends, holding costs while work drags on, renovation overruns, and short-term capital gains taxed as ordinary income. The 70% rule — pay no more than 70% of after-repair value minus repair costs — exists to build in the buffer.

**Also known as:** flipping houses, house flipping, flip

**Related terms:** [Hard Money Loan](https://finicade.com/glossary/hard-money-loan), [BRRRR Method](https://finicade.com/glossary/brrrr-method), [Closing Costs](https://finicade.com/glossary/closing-costs), [Capital Gains Tax](https://finicade.com/glossary/capital-gains-tax), [Construction Loan](https://finicade.com/glossary/construction-loan)

Source: https://finicade.com/glossary/fix-and-flip