The fix-and-flip budget sanity check: does the ARV math survive?
Rung 8 of 10 · Red-team audit
1 · Learn the move · Red-team audit
A flip pro-forma almost always shows a fat profit because it subtracts only two costs, purchase and rehab. From an ARV the investor wants to believe. A red-team audit turns AI loose on that optimism: it quotes each shaky assumption, challenges the ARV and the missing costs, and never softens them. Holding costs, financing, both sets of closing costs, selling costs, and a rehab contingency are the usual omissions. Each gets flagged as an UNKNOWN that eats the 'profit,' not invented. First-pass stress-test for the investor to verify, not investment advice.
Red-team this flip pro-forma. Quote each optimistic assumption, challenge the ARV and every omitted cost, mark them UNKNOWN (don't invent a number), and show that the 'profit' is a gross spread. First-pass, not investment advice.
2 · Your turn. You write the prompt
Your investor's flip math reads: ARV $450,000 (from 'the comps'), purchase $280,000, rehab budget $50,000, projected profit $120,000. There's no line for holding costs, loan interest, closing costs on either end, selling costs, or a rehab contingency. Write a prompt that stress-tests this before your client wires an earnest-money deposit.
Remember: the AI sees only your prompt, not this page. If the situation isn't in your prompt, it doesn't exist.
Optional. These shape the output when you run your prompt below, not your score.