A fix and flip buy box is a short list of hard filters you apply before you look at the spread — build year, geography, finished price and buyer pool. Gerardo Hernandez, who runs five to seven flips a quarter in Arizona through Dos Amigos Property Solutions, uses four: 1990 or newer, West Valley only, under $450,000 finished, and no 55-and-older communities.
Those filters are not preferences. They are the difference between a property that goes under contract in two weeks and one that sits. Hernandez has never had a project run more than three and a half months from purchase to sale — except the two he bought outside the box, which are still on the market.
This article covers the four filters and the reason behind each, why the middle price band is currently the worst place to be, how to pull ARV comps in a market that moves monthly, when an in-house crew beats subcontractors, and the payroll math that actually caps how many projects you can run.
Key takeaways
- Four filters do most of the work: build year 1990 or newer (cosmetic-only rehab), inside your own drive radius, finished value at or below the local median, and no age-restricted communities that shrink your buyer pool.
- Pull ARV comps from the last 90 days only. Wholesalers routinely pitch after-repair values based on where the market was a year ago.
- Going $20,000 over rehab budget does not let you list $20,000 higher. The market sets the number regardless of what you spent.
- A four-person in-house crew with only roof and HVAC subbed out compressed Hernandez’s rehab timeline to three to six weeks and killed the bid-to-bid price variance he saw on near-identical houses.
- Payroll is the real scaling constraint: $20,000 to $30,000 a month owed whether or not projects are running, plus roughly $3,000 a month in carry per property — over $50,000 out the door before a dollar comes in.
From the Real Estate Pros Show
This article draws on an interview with Gerardo S Hernandez of Dos Amigos Property Solutions on the Real Estate Pros Show, hosted by Freddie Steen.
The Four Filters in a Working Flip Buy Box
Every investor has a buy box whether they have written it down or not. Hernandez wrote his down, and it comes to four lines:
- Built 1990 or newer. The only major systems he expects to replace are the roof and the AC. Plumbing and electrical are modern enough that he is not opening walls. Everything else is cosmetic, which is the only kind of rehab that stays on a three-to-six-week schedule.
- West Valley only. He lives on the west side of Phoenix. A project on the east side means an hour of driving each way just to check on it. Drive time is a cost line even when nobody bills you for it.
- Finished value under $450,000. Arizona’s median price sits around $450,000. Staying at or below it keeps every finished house inside the first-time buyer pool, which is where the demand is.
- No 55-and-older communities. An age-restricted deed cuts your buyer pool down before you have even started. The point of the buy box is to keep the pool as wide as possible on exit.
None of these filters mention the spread. That is deliberate — the numbers get run after a property clears the box, not instead of. Hernandez names buying outside the buy box as the single most common rookie mistake he sees: someone finds a property that pencils on paper, buys it because it looks like a deal, and inherits an hour commute, 1950s plumbing, or a buyer pool half the size they assumed.
Why the Middle Price Band Is Where Flips Get Stuck
The flippers getting hurt right now are the ones playing in the middle, and the reason is affordability. A mid-tier buyer faces the same interest rate as a first-time buyer but needs a larger loan to clear it. Meanwhile luxury buyers are largely rate-indifferent — they have cash or they do not care.
That leaves the middle band as the one segment where rates bite hardest and there is no cash cushion underneath.
Entry-level product is moving for a specific reason: renovated first-time buyer homes are listing at roughly the same price point as unrenovated stock in the same neighborhoods. A buyer comparing a finished house to a project house at similar money takes the finished house. That is why Hernandez’s sub-$450K inventory clears fast.
His own evidence for the middle is unambiguous. Across his flipping history, no project has sat longer than three and a half months from purchase through sale. The two houses he currently has listed above his usual band — bought outside the buy box — are sitting longer than anything he has ever done.
The mistake underneath it is chasing the bigger gross number. A mid-tier flip shows a larger potential profit on the spreadsheet, so it looks like the better use of capital. What the spreadsheet does not show is the extra months of carry, the price cuts, and the risk that the market moves under you while you wait. On a per-month-of-capital basis, the smaller, faster deal usually wins.
Just because you put $20,000 over budget for your rehab, that doesn’t mean you can now sell your house for $20,000 more. The numbers are the numbers.
— Gerardo Hernandez, Dos Amigos Property Solutions
Pricing ARV in a Fast-Moving Market: The 90-Day Rule
Comps older than 90 days are not comps. Hernandez holds a hard 90-day window on every after-repair value he underwrites, because inventory levels have been shifting fast enough that a six-month-old sale describes a market that no longer exists.
This matters most on wholesale offers. His recurring complaint: wholesalers bring him deals with ARVs pulled from where values were a year ago. The rehab number might be honest and the purchase price might be reasonable, but if the exit is priced off stale data the whole deal is fiction. Rerun the ARV yourself on 90-day comps before you respond to any assignment.
The second numbers mistake is more expensive because it happens after you own the house. Overspending on rehab does not raise your exit price.
If you underwrote the house at $450,000 and you went $20,000 over on the rehab, you do not get to list at $475,000. Buyers pay what the comps support. The $20,000 comes out of your profit, not out of the buyer’s pocket. Hernandez calls this the second-biggest rookie mistake he sees, and it is the reason he personally owns the design decisions on every project — scope creep is a numbers problem disguised as a taste problem.
Practical version: fix your ARV from 90-day comps, back into a maximum all-in cost, and treat that ceiling as fixed no matter what you find behind the drywall.
In-House Crew vs Subcontractors: What Changed the Math
Hernandez moved from individual subs to a full-time crew because sub pricing on near-identical houses would not hold. He was hiring a painter, a floor guy, a framer and a drywall guy separately, managing all four himself, and watching quotes on essentially the same scope come in $1,000 or $2,000 apart from one house to the next. Managing that many relationships was also capping him at seven or eight flips a year.
The transition came through his business partner Zach, a former general contractor project manager who got laid off about three years ago. When Zach came on, some of his former colleagues had been laid off too. They hired two of them directly.
Today the operation runs a four-person full-time crew plus Zach as project manager. The only trades subbed out are roof and HVAC — the two systems a 1990-or-newer house is most likely to need and the two that genuinely require a specialist.
The result that matters is speed: rehabs now run three to six weeks. Compare that to Hernandez’s first flip, where he did new plumbing and a new roof on a house that did not need either, and spent four months on the rehab. Every week you cut is roughly $750 of carry saved per property at his $3,000-a-month figure, plus faster capital recycling.
The tradeoff is that an in-house crew converts a variable cost into a fixed one. That is the subject of the next section, and it is not a small thing.
The Cash Flow Trap Behind Scaling to 5-7 Flips a Quarter
Payroll is owed whether or not you have projects running. Hernandez pays $20,000 to $30,000 a month for his crew. Whether there are ten projects going, three, or one, that number does not move.
Stack the carry on top. Roughly $3,000 a month per property in mortgage costs across five properties is another $15,000. Add rehab spend and he is more than $50,000 out the door in a month before any revenue arrives.
That creates a specific pressure most flippers do not talk about: the temptation to buy a marginal deal just to keep the crew busy. Hernandez refuses to do it — he is explicit that he will not take a deal just to take a deal, and the numbers have to work. But the honest consequence is that he hesitates to add a new project until an existing one sells or goes under contract. The crew that made him fast also made him cautious.
His fix is on the lending side. He is working with a lender that funds full purchase plus rehab and defers interest payments. The arithmetic: if he is not putting $50,000 down on a deal, that $50,000 covers payroll instead. He estimates that alone would let him roughly double deal volume, and he would accept less profit per deal to run a volume game.
Note the sequence — this only became a problem about eight months in, when he went from three or four deals at a time to five to seven. At the lower count, existing funds covered it.
The Agent-to-Investor Math: Four Flips a Year
One flip replaced five closings. That is the number that pulled Hernandez out of traditional agency work.
He was a top agent for three years — 12 sales the first year, 16 the second, 24 the third. Then rates rose and, in his words, it went dead. He was still working his sphere and running drip campaigns, but showings turned into renters, buyers went with other agents, or they signed directly with a builder and cut him out of the transaction.
His first flip, in Surprise, Arizona, made $52,000. Average commission in Arizona runs around $10,000. Five closings’ worth of income from one project — that was the comparison that ended the debate.
The prescription he now gives agents is deliberately modest: four flips a year, one a quarter, at $25,000 profit each. That is a six-figure part-time income built on skills an agent already has — reading comps, knowing neighborhoods, and listing the finished product themselves.
The partnership structure is worth copying. Zach handles day-to-day operations — materials, crew scheduling, keeping projects on timeline, small handyman items on site. Hernandez handles deal analysis, ARV verification, rehab budgeting, design, funding and all payables. They split profit fifty-fifty on every deal, including the one that only made $8,000. Splitting a small win is the price of having someone in the field while you are underwriting the next deal.
Frequently asked questions
Why should a flip buy box exclude homes built before 1990?
Because a 1990-or-newer house limits your risk to the roof and the HVAC. Plumbing and electrical in that vintage are modern enough that you can plan a cosmetic-only rehab without opening walls.
Older housing stock introduces the systems that blow budgets and timelines — mid-century plumbing, 1940s electrical, and the permitting and inspection delays that come with replacing them. If you can absorb that risk and price it, older houses are workable. If you are running a three-to-six-week rehab schedule, they are not.
How far back should you pull comps when calculating ARV in a shifting market?
Ninety days. When inventory levels are moving quickly, a sale from six or twelve months ago describes a different market and will overstate your exit.
Apply this especially to wholesale offers. Gerardo Hernandez says wholesalers regularly bring him deals with after-repair values based on where prices were a year prior. Rerun the ARV yourself on recent comps before you take anyone’s underwriting at face value.
Is it better to hire a full-time crew or use subcontractors for flips?
Subs make sense at low volume; a full-time crew makes sense once you are running multiple projects at once and sub pricing stops being consistent. Hernandez was seeing $1,000 to $2,000 swings on essentially identical scopes between houses, and managing four separate trades himself capped him around seven or eight flips a year.
A four-person in-house crew with only roof and HVAC subbed out brought his rehabs down to three to six weeks. The tradeoff is that payroll becomes a fixed cost you owe in slow months, so do not make the switch until your deal flow can support it.
How much working capital do you need to run five to seven flips at once?
Plan for more than $50,000 a month going out before revenue arrives. At Hernandez’s scale that is $20,000 to $30,000 in crew payroll plus roughly $3,000 a month in carry per property, before rehab materials.
The lending structure changes the answer significantly. If a lender funds purchase plus rehab and defers interest, the down payment capital you would have tied up in the deal can cover payroll instead. This is a general description of one operator’s approach, not lending advice — terms vary and you should price them against your own deal flow.
How many flips a year does a real estate agent need to replace commission income?
Four, at roughly $25,000 profit each, produces a six-figure part-time income. That is the target Hernandez gives agents: one flip per quarter.
The comparison that makes it work is commission math. Average Arizona commission runs around $10,000, so a single $52,000 flip — his first — equalled five closings. An agent already has the comp-reading skill and can list the finished house themselves, which removes one cost line from every project.
The bottom line
Write your four filters down this week and test them against the last three deals you passed on and the last three you bought — if a property you regret buying would have failed the box, the box is doing its job.
