Reference
The flipper's glossary
Speak the language. Close the deal.
ARV
After Repair Value — the estimated market value of a property once renovations are complete.
70% Rule
Max purchase price = (ARV × 0.70) − rehab cost. Rule of thumb to leave room for profit and risk.
MAO
Maximum Allowable Offer. The highest price you can pay and still hit your profit target.
Comps
Comparable sold properties used to estimate ARV. Should be recent (≤90 days), close (≤½ mile), and similar.
Hard Money
Short-term, asset-based loan from private lenders. Higher interest, faster close, lends on ARV.
Points
Upfront fee on a loan. 1 point = 1% of loan amount, paid at closing.
EMD
Earnest Money Deposit. Cash put up to show good faith when signing a purchase contract.
Title Insurance
Protects buyer (and lender) against undiscovered liens, ownership claims, or title defects.
Scope of Work
Detailed line-item list of every repair and upgrade in the renovation, with materials and labor.
Draw Schedule
Payment schedule that releases funds to contractors as defined milestones are completed.
Holding Costs
Monthly carrying expenses while you own the flip: loan interest, taxes, insurance, utilities, HOA.
Days on Market (DOM)
How long a listing has been active. High DOM signals price or condition issues.
Wholesaler
Investor who contracts a property and assigns the contract to an end buyer for a fee.
Turnkey
A property fully renovated and move-in ready, typically sold to a retail buyer.
Forced Appreciation
Increase in value created by improvements, not market movement.
Closing Costs
Fees paid at closing: title, escrow, recording, lender fees, transfer taxes. ~2–4% per side.