A $58k Flip in OKC —
Underwrote vs. Actual.
The underwrite said $32k net. The closing statement said $13.8k. Same property, same buyer, same neighborhood — the gap was in the line items most calculators don't make you look at.
This isn't one specific address. It's representative of how an OKC east-side flip with this profile actually runs — pulled together from the patterns I see on the deals Tuff Homes closes. The numbers are illustrative, but every line item moved exactly like this on at least one project I personally signed for.
If you've never had a flip miss your underwrite, you haven't done one yet. The question isn't whether the budget moves — it's how much room you built into the deal to absorb it before profit disappears.
Here's the underwrite. Here's the actual. Then the lessons.
The Deal Going In
3 bed, 1 bath, 1,150 sqft. Older bones — original 1950s build, hardwood under carpet, single-pane windows. East-side OKC, a neighborhood where comps had been steadily moving up and a clean 3/2 was running $235k-$245k after a full cosmetic plus a bathroom addition.
Locked it up at $115k with $3k in closing. Hard money lender funded 90% of purchase and 100% of rehab at 11% interest and 2 points. Underwrote a 4-month rehab plus 2 months to list, market, and close — 6 months of carry total.
| Purchase price | $115,000 |
| Purchase closing | $3,000 |
| Rehab budget | $58,000 |
| Hard money interest + points (6 mo) | $9,400 |
| Holding costs (taxes, insurance, utilities) | $3,600 |
| ARV | $239,000 |
| Sale closing (commissions + concessions) | $18,000 |
| Projected net profit | $32,000 |
On paper, clean deal. All-in around $207k against a $239k ARV — about 86.6% of ARVat full underwrite. Not a screamer, but inside Tuff Homes' box for an east-side cosmetic-plus.
That number — 86.6% — is the one I should have flagged harder going in. I'll come back to it.
Where the Dollars Actually Moved
Five line items moved between underwrite and closing. None of them were catastrophic in isolation. All five together cut the profit in half.
1. HVAC — scoped $5,000, came in at $8,200
Walkthrough HVAC tech said the existing system was on its last legs and a new 3-ton unit would slot in. Standard call.
What the walkthrough missed: the existing ductwork was sized for a 2-ton unit from the 1970s and undersized for the new equipment. To run a 3-ton with proper static pressure, the contractor had to add a return on the back of the house and resize three supply runs. That's $3,200 of extra labor and ducting that wasn't in the original quote — and you don't know about it until the tech pulls the plenum off.
East-side OKC fact pattern: 1950s-1970s houses on the east side were built for window units or undersized central air. Almost every full-rehab in that vintage needs ductwork rework if you're upsizing the unit. Scope it on the front end or eat it on the back end.
2. Bathroom subfloor — $0 in budget, $2,800 at tear-out
Pulled the cast-iron tub. Underneath: rotted subfloor running from the drain out to the toilet flange and into the wall plate. Probably a slow tub-drain leak going back years.
By the time we knew, the framer was already on site. Cut out the rotted subfloor, replaced two joist sections, replaced baseplate to the exterior wall, new subfloor, new wax ring, reset the tub. $2,800 in labor and materials. Nothing dramatic — just unbudgeted.
The frustrating part: you can usually catch this on the walkthrough if you know what to smell for. Bathroom rot has a specific musty-sweet smell at the floor edge near the tub. If the bathroom smells like that, assume subfloor work and budget $2,500-$3,500 for it on the front end.
3. Cabinet vendor delay — 3 extra weeks of carry
Kitchen cabinets ordered week 2. Vendor quoted 4 weeks lead time. Cabinets actually showed up week 9, with a chip on one upper that triggered a partial reorder and another 10 days.
No direct dollar line item — but every day the project sits, hard money interest is accruing on the full loan balance, utilities are running, insurance is burning, taxes are accruing. Cumulative damage: about $1,500 in extra carry across that 3-week slip.
This is the line item nobody puts on a spreadsheet because there's no invoice for it. There's also no way to recover it.
4. City permit — quoted 3 days, took 11
OKC Development Services on a routine residential remodel permit. Submitted Tuesday, expected approval Friday. Actually pulled the permit the following Friday of the following week. Plan reviewer was out. Nothing to do, nothing to escalate.
That's 8 extra days of carry I had no control over. Across the full deal, this kind of municipal friction added another roughly $400 in hard money and holding.
5. Pipe leak on final walk — $1,400 in repaint plus extra carry
Punchlist week. Plumber sweated a copper joint behind the laundry wall, came back the next day with a slow drip in the ceiling below. Caught it before it became a real problem, but it took out a section of ceiling drywall and the freshly-painted living room wall. Drywall patch, mud, sand, repaint that whole wall to match. $1,400 and another 4 days before we could list.
Sub eventually credited some of it, but the back-and-forth dragged. Net out-of-pocket: $1,400.
| Underwrote rehab | $58,000 |
| HVAC overrun | + $3,200 |
| Subfloor | + $2,800 |
| Pipe leak repaint | + $1,400 |
| Other punchlist creep | + $3,600 |
| Actual rehab | $69,000 |
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The rehab finishing 3 weeks late on cabinets, 8 days late on the permit, and 4 days late on the pipe leak pushed the listing date back 6 weeks. That's another $1,500 in carry across HM interest, utilities, taxes, insurance.
We listed at $239k. Sat 9 days. Best offer came in at $235k with the buyer asking for $4,700 in seller concessions toward closing. We took it — the alternative was another month on market and another $1,000+ in carry against a soft week of comps. (The investor read on appraised vs. listed value lives in reading an appraisal as an investor.)
Closing math: 6% commission ($14,100), $4,700 buyer concession, $1,200 in seller-side title, prorations, and the standard closing junk. Total sale-side cost: $20,000.
| Line | Underwrote | Actual |
|---|---|---|
| Sale price | $239,000 | $235,000 |
| Purchase + closing | $118,000 | $118,000 |
| Rehab | $58,000 | $69,000 |
| Hard money + holding | $13,000 | $14,500 |
| Sale-side closing | $18,000 | $19,700 |
| Net profit | $32,000 | $13,800 |
$13,800 on six months of work, three subcontractors, a hard money loan in my name, and a deal that, in fairness, never had a single catastrophic event. Just five line items each moving 5-15% in the wrong direction.
That's the actual shape of a missed flip in OKC. It's never one big thing. It's five small things compounding while you're busy managing the project.
Five Lessons I Now Underwrite Into Every Flip
1. Carry 15-20% rehab contingency or you don't have an underwrite — you have a hope.
On a $58k scoped rehab, a 15% contingency is $8,700. A 20% contingency is $11,600. The actual overrun on this deal was $11,000. The contingency would have absorbed it cleanly and the underwrite would still have penciled.
The mistake operators make is treating the contingency as "extra room" and lowering it to make a tight deal pencil. That defeats the purpose. The contingency is not optimism padding — it's an actuarial reserve. It pays out almost every time.
2. Subfloor risk is hidden until tear-out — but the walkthrough gives you clues.
You can't see rotted subfloor through tile or carpet. You can sometimes smell it at the baseplate near the tub or around the toilet flange. You can sometimes feel it underfoot — a soft spot at the tub edge, a slight bow toward the drain.
If you're flipping a house with original tile bathrooms and a cast-iron tub on a 1950s-1970s OKC build, budget $2,500-$3,500 for subfloor and joist work on the front end. If it turns out clean, great — that's contingency you didn't need. If it's rotted, you were ready.
3. HVAC ductwork is the most under-scoped trade on a full rehab.
The HVAC tech who gives you the install quote usually isn't looking at duct sizing. He's looking at unit size and condenser placement. The ducting question only comes up once the unit is in and the static pressure is wrong.
When you're scoping a full rehab on a 1950s-1970s east-side OKC house and the existing system is older than the tenant, assume you're replacing or reworking ductwork. Add $2,500-$4,000 to the HVAC line item for that scope. If the existing ducts work for the new unit, that's found money on the back end.
4. Holding cost compounds — and it's the line item operators feel last.
A 6-week delay on this flip cost $1,500 in direct carry. But the carry isn't the only damage. While the deal sat, three other things happened: my hard money lender's capital was tied up so I couldn't deploy on the next deal under that line, my contractors were idle and started taking other work, and my own attention was stuck on punchlist instead of acquisitions.
Direct carry: $1,500. Opportunity cost: probably another $5k-$8k in missed deals across that window. Holding cost doesn't just hit the deal you're in — it costs you the next one too.
5. Budget vs. actual in real time — or the overrun catches you at the closing table.
Most operators track budget the same way I used to: a Google Sheet with the original SOW on the left, a column for "actual" on the right, updated whenever the GC sends an invoice. By the time the column is current, the money is already out the door.
If you can't see the overrun building in week 4, you can't kill it in week 5. You only see it in week 10 when the deal closes and the wire is smaller than you expected. That's exactly what we built into VAC's expense tracker — every receipt ties to a specific SOW line item and the budget consume bar moves in real time. When HVAC hits 110% of scope, you see it that day, not 6 weeks later.
Back to the 86.6%
I flagged earlier that this deal underwrote at 86.6% of ARV all-in — inside the Tuff Homes box, but not by a lot. The classic flip rule is the 70% rule: buy + rehab should come in at or under 70% of ARV. That number is conservative because it's designed to absorb exactly the kind of compounding misses this deal walked through.
At 70% of ARV, this deal would have penciled at a max all-in of $167k. We came in at $207k underwrote. There was no real cushion for the rehab moving 19% and the sale price coming in 1.7% soft.
The lesson isn't that 70% is sacred. It's that the further you stretch above 70%, the less margin for error you're buying. At 86.6%, every line item has to land. That's a flip you can run, but you have to project-manage it like a hawk and you have to underwrite contingency into the cushion that's left.
On the next one, I bought tighter. $108k purchase, same ARV profile, same neighborhood. Same rehab scope. Net cleared $28k. Same operator, same crew, same market — different basis.
What I'd Tell Anyone Doing Their First OKC Flip
Buy harder than you think you have to. Scope HVAC ductwork and bathroom subfloor every single time on pre-1980 inventory. Carry 15-20% rehab contingency in the underwrite — and don't spend it before week 4. Watch budget consume daily, not monthly. Assume the permit takes longer than the city says. Assume cabinets show up late.
None of that makes you slower. It makes the deals that survive contact with reality also survive at closing.
And track every line item against budget the whole way through. The $13.8k on this flip wasn't the deal's fault — it was the lack of a real-time tracking system. That's the part I can't un-learn.
Underwrite the next one with the contingency baked in.
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