Light rehab vs. heavy rehab when money costs 10%
With hard money near 10%, a mid-priced flip burns roughly $3,600 a month before a single wall is opened. That carry is why experienced flippers now favor light, fast rehabs over heavy ones: the same house, modeled two ways on public sample numbers, nets about $54,000 in four months or about $13,000 in eight, and the heavy version only works if the resale price rises too.
1. The two jobs
- Flooring, paint, trim
- Kitchen and bath surfaces
- Fixtures, lighting, hardware
- Roof and systems stay as they are
- Roof, electrical, plumbing
- Foundation or structural repair
- Layout changes, added bed or bath
- Permits and inspections on the critical path
The dividing line is the big-ticket list. Touch it and the schedule, the permit risk, and the interest clock all change.
2. What one month costs
Interest is the biggest line and it scales with price and rate, not with how much work you do. Every extra month costs the same whether the crew shows up or not. Conventional-rate backdrop: Freddie Mac PMMS.
Three months of permit delay on a heavy job is close to $11,000 of carry with nothing to show for it.
3. Same house, two plans
Sample terms from the public report: 76% purchase loan, 100% rehab loan, 10% interest, 1 point, 6.5% selling costs, $600/mo holding, $5,000 misc. $340,000 is the report's own "starts to pencil" purchase line; $90k / $140k and $540k / $565k are its rehab and ARV tiers. Rounded.
The heavy plan spends $50,000 more and $14,000 more carry to chase $25,000 of extra resale. It needs the optimistic price just to stay above zero.
A heavy budget built on the same ARV as a light one. If the work does not move the resale price, the extra months only move the profit down.
4. Carry grows in a straight line, profit does not
Time is the one input that keeps costing after the budget is spent. The light plan closes the clock before delays can compound.
5. Why the sample house failed at asking price
From the public sample report, six-month hold. Eight of nine cells lose; the one that does not is the lightest rehab at the most optimistic price.
The grid reads the same way as the scenario table: every step down the rehab column costs more than the matching step across the ARV row can recover. At high rates, the price you pay has to fund the work and the time.
6. What flippers are buying now
- Big-ticket items already replaced, finishes dated
- Permits on file for the roof and systems
- Priced below what an owner-occupant would pay
- Looks fine in photos, roof and sewer at end of life
- "Newer roof" with no permit or invoice behind it
- A budget that cannot be set until the walls open
Listing copy tells you what the seller says was replaced. County permit records (Tacoma: Accela permit portal) and an inspection tell you what actually was.
The catch is competition. A house with new systems and a tired interior is also what an owner-occupant with conventional financing wants, and they can pay more than a flipper.
Why we publish the model. Every PropDossier report runs the same sensitivity grid with the reader's own loan terms, so the light-versus-heavy decision is a number, not a mood. See how each figure is sourced in our methodology and the full worked case in the sample report.
Please read. This article is for informational purposes only. Loan terms are sample assumptions, not a quote; figures are estimates rounded from a public sample analysis dated 2026-07-22. It is not an inspection, appraisal, lending, or investment advice. Verify independently and consult licensed professionals before any real estate decision.
Related reading
Sources
- Freddie Mac Primary Mortgage Market Survey (PMMS): weekly conventional mortgage rates, the market backdrop for the 10% hard-money assumption, checked 2026-08-27.
- City of Tacoma permit portal (Accela): search an address for permits on file, checked 2026-08-27.
- Pierce County Assessor-Treasurer parcel search (ATIP): parcel sales history, deed type, excise number, finished area, tax, checked 2026-08-27.
FAQ
What counts as a light rehab versus a heavy rehab?
A light or cosmetic rehab replaces finishes: flooring, paint, kitchen and bath surfaces, fixtures, lighting. The roof, systems, and structure stay. A heavy rehab touches those big-ticket items: roof, electrical, plumbing, foundation, layout changes or added rooms. Light jobs typically run one to two months; heavy jobs four to six or more.
How much does holding a flip cost per month?
In the PropDossier sample report, a house bought at $404,444 with a 76% hard money loan at 10% carried about $3,620 a month: roughly $2,560 purchase-loan interest, $460 interest on the rehab draw, and $600 in taxes, insurance, and utilities. Your figure scales with price, loan size, and rate.
Does a heavy rehab ever make sense at high rates?
Yes, when the purchase discount is deep enough to fund both the work and the extra months, and the after-repair value is supported by real sales. The heavy scenario in this article only stays positive because it assumes a higher resale price; at the baseline value it loses money.
Are the loan terms in this article a real quote?
No. They are sample hard money terms used in the public report: 76% purchase loan, 100% rehab loan, 10% annual interest, 1 point origination, 6.5% selling costs, $600 a month holding, $5,000 miscellaneous. Replace them with your lender's numbers before deciding anything.
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Get a free sample analysisPublished 2026-08-26 · Updated 2026-08-26 · PropDossier Research