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Sophistication in real estate content is a sales tool. The more complex the framework, the more dependent you become on the person teaching it. Your dependency is the product.
“Net to me is $340/month” is infinitely more useful to you than “strong cash-on-cash return.”
You’ll get my three best strategies for:
1. Not miss pricing the cost of a rehab
2. Flip vs Rental
3. What people forget (resale cost estimate)
Mistake 1: Estimating Rehab Costs Wrong
Lukewarm investors price rehabs from fear or hope. Neither works.
Winning investors start with your highest-leverage, lowest-cost items first. For residential in Indiana, that’s flooring and paint.
The 4/4 method.
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$4/sqft for LVP flooring: $2 materials, $2 labor
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$4/sqft for paint
Those two line items move a house from Grandma Horrid to Nouveau Riche faster than anything else you can do. Full stop.
A 2,000 sqft house is only $16K for every foot of wall and every inch of flooring to be sparkling and new. NOT $50K. (which is what I always hear novices mention)
But also, know your danger items before you start swinging a hammer.
Cabinets and vanities.
Nobody prices cabinets correctly. Range of $250-$500 per linear foot.
They cost more than you expect, take more work than you plan, and detonate a budget that looked clean on paper.
Treat cabinets like a loaded shotgun: handled right, and they transform a space. Handled wrong, and they blow your head off.
Mistake 2: Flip vs. Rental
These are not the same strategy with different timelines. They are different bets on different risks. Confusing them is how people end up in the wrong deal for the wrong reasons.
A flip gets you in and out in 90 days. You are not tethered to:
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What the market does in three years
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What happens to the neighborhood’s job base
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Or whether a better area pulls demand away from yours.
Short exposure window by design.
A rental is a different game. Someone else covers your debt service while you wait. Your payday is not today. It may be five years from now when renovation value stacks on top of 3-5% annual appreciation.
(Plus tax benefits)
But that math only works if you modeled vacancy honestly. One empty month wipes out months of cash flow. I don’t believe that is a footnote. That is the deal.
Know which game you are playing before you run a single number.
Mistake 3: Forgetting Resale Costs
Every investor prices the entry. Amateurs never price the exit with the same structure.
The 7% rule.
When you sell, estimate 7% of the sales price is gone before you see a dollar.
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3% buyer agent compensation
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3% listing agent compensation
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1% closing costs
Price your exit before you price your entry. Use a napkin. If the deal doesn’t work with 7% off the top, it doesn’t work.
BONUS:
IRR is built for investment banking.
For stock portfolios.
For real estate funds managing thousands of units across markets.
IRR requires predicting interest rates, cap rates, tenant demand, and population shifts ten years out. It is the worst possible tool for pricing a house.
IRR to me is like trying to predict annual rainfall totals.
Is it possible?Yes
But is predicting rainfall totals realistic?No.
When you see IRR, discounted cash flow analysis, and net present value in real estate content, ask one question: who benefits from you believing this is complicated?
Closing Info:
If you can’t do the math on a napkin, the math is too complicated.
The gurus need you confused. Confused people buy courses, tools, and coaching.
My work is in Indiana as a real estate broker with CENTURY 21 Scheetz. If you resonated with this article and want to discuss your next real estate investment, send me an email.
First published on Substack, June 10, 2026. Get new articles by email on my Substack.
Nolan Lamkin, REALTOR®, CENTURY 21 Scheetz, Indianapolis. (317) 696-9545, nlamkin@c21scheetz.com. More about my work.
