I Forgot About the “Soft” Costs — And It Almost Wrecked My Flip

I thought I had the numbers locked in.

ARV? ✅
Rehab? ✅
Contractor quote? ✅

I even padded in contingency like a good little investor.

But then I got blindsided — by soft costs. Fees. Holding costs. Wire transfers. The stuff you don’t see until it’s draining your margins like a silent leak under your kitchen sink.

And let me tell you — forgetting about soft costs almost turned a profitable flip into a breakeven headache.

Let’s break this down so it never happens to you.

🔍 What Are Soft Costs (And Why They Matter More Than You Think)?

Soft costs are the hidden landmines on every deal. They’re not hammers or drywall, but they absolutely eat into your profit.

Examples of Soft Costs:

• Appraisals
• Draw inspection fees
• Wire fees
• Permits
• Title fees
• Lender points
• Loan doc prep fees
• GC management fees (sometimes)

💡 Pro Tip: Soft costs can’t exceed 10% of your total reno budget — and neither should your blind spots​.

📉 The Real Cost of Ignorance: My Flip Breakdown

Here’s how the numbers looked on my last flip:

That $6K came straight out of my margin.

💰 3 Ways to Avoid the Soft Cost Sucker Punch

1. Use a Draw Fee Schedule Before You Close

2. Plug Soft Costs Into Your Calculator

Use the “Other Fees” section on your budget sheet. Don’t ignore it.

3. Create a “Miscellaneous Burn Rate” Line Item

Add a 3–5% line item specifically for soft costs and budget leakage. Build it into every offer you make.

👀 Why This Matters

Flipping isn’t about the glamour shots at the end. It’s about the math. You don’t get paid in “potential.” You get paid on net margin.

So when you forget soft costs, you’re not just underbudgeting.

You’re lying to yourself.

🧠 Final Thought :

When you respect the small line items, you protect your big payday.

It’s the difference between a $40K win and a $5K whimper.

I forgot once. I won’t forget again. Neither should you.

💬 Book Your Investor Strategy Call

Prefer to text? 📲 863-450-0150