Utah Fix-and-Flip Planning Guide

1. Define the project first

Strong projects start with a written plan, not a property listing. Before you look at a single house, put the following on one page so every later decision has something to be measured against:

• Purpose and exit: Will you sell, rent or hold? You can change your mind later, but your first answer shapes the financing, the finish level and the timeline.
• Scope level: Cosmetic updates, system replacements (roof, electrical, plumbing, heating and cooling) and structural or layout changes carry very different risk, cost and permit needs.
• Who does the work: Which parts need a licensed contractor, which parts you are qualified and permitted to do yourself, and who manages the schedule.
• Your team: A real estate agent, an inspector, a lender, a title or escrow officer, an insurance agent, a tax professional and an attorney. Know who you will call before a problem appears.
• Walk-away rules: The conditions under which you will not buy, or will stop, written down while you are calm.

2. Due diligence before you commit

Due diligence is the work you do to confirm that the property is what you believe it is. The Consumer Financial Protection Bureau suggests making a purchase offer contingent on obtaining financing and on a satisfactory inspection, so you are not contractually required to buy if the loan or the inspection falls through. How contingency periods and deadlines work in your contract is a question for your agent or attorney.

3. Realistic cost categories

Projects most often go wrong on the numbers that were never on the spreadsheet. Build a line-item budget that includes every category below, collect written bids, and compare bids by scope rather than by the bottom-line price alone. This guide intentionally gives no typical dollar amounts or percentages, because they vary by property, lender and season.

4. Permits, code and licensed contractors

Permit rules are set and applied locally, so the most reliable step is to contact the city or county building department before you finalize scope or accept bids. Utah's State Construction Code framework is found in Utah Code Title 15A, and local building officials generally handle plan review, permits and inspections for projects in their area. Ask the department which parts of your scope need permits, what inspections are required, and what a final sign-off looks like.

• Check the property's history. Ask whether earlier work was permitted and closed out. Unpermitted work by a previous owner can become a cost and a delay for you.
• Verify the contractor. Utah licenses construction trades through the Division of Professional Licensing (DOPL), part of the Utah Department of Commerce. Use DOPL's license verification tool, compare the name and classification to the contract, and confirm that the classification fits the work being bid.
• Put the scope in writing. DOPL reports that it hears complaints where no agreement exists or where the agreement is too vague to show what was promised. DOPL publishes an optional Residential Construction Agreement, with plan and change-order exhibits, for homeowners and contractors. It is provided as-is and is not legal advice, so have an attorney review any contract you intend to rely on.
• Decide who pulls permits. Write down who applies, who pays fees and who schedules inspections.
• Control changes. Require written change orders with price and schedule impact before extra work begins.

5. Qualified inspections

An inspection is information, not a guarantee. The CFPB advises scheduling a home inspection as soon as possible after choosing a home so there is time to resolve problems, and choosing an independent inspector who is accountable to you. It also notes that in some areas inspectors may not be required to be licensed, so ask for references and look the inspector up with your state or county licensing authority.

• General inspection: A broad look at the visible condition of the home and its major systems. Attend it if you can, so the written report makes sense.
• Specialist follow-up: When the general inspector flags something outside their scope, such as structure, drainage, roofing, electrical, plumbing or heating and cooling, ask a qualified specialist to evaluate it before you rely on your budget.
• Inspection is not appraisal: An inspection describes condition. An appraisal estimates value. Lenders generally order appraisals; they do not replace an inspection you choose to order.
• Use findings in the plan: Update the scope and budget, ask the seller about repairs or credits where your contract allows, or walk away if the risk no longer fits your rules.
• Think about the sale side: Consider what a future buyer's inspector is likely to find in the finished home, and whether a pre-listing review makes sense.

6. Reserves and contingency

A reserve is cash you do not plan to spend but must be able to spend. No single percentage fits every project, so size reserves from your own numbers and review them with your lender and a financial professional.

• Carry reserve: Your monthly holding and loan cost multiplied by a realistic number of months, including delays you cannot control.
• Repair contingency: Money set aside for conditions that stay hidden until walls, floors or yards are opened.
• Sale-side reserve: Funds for buyer concessions, repairs raised in the buyer's inspection and price changes if the market moves.
• Personal liquidity: Money outside the project, so a stalled sale does not force a decision you would not otherwise make.

A useful stress test: If the work takes twice as long as planned and the sale takes longer than expected, can I still cover every payment without selling at a price I do not accept? Lenders may have their own reserve, draw and inspection requirements, so ask early.

7. Exit planning

Plan the exit before you buy, then plan a second one. The most common options are selling, renting or holding, and each depends on conditions you do not fully control.

• Sell: Your list price depends on market conditions, an appraiser's view of value and the buyer's financing. Decide in advance how you would respond if an appraisal comes in below your expectation.
• Rent or hold: Review whether realistic rent would cover the carrying cost, what refinancing would require, and what landlord duties, insurance and taxes apply. This is a different business with different risks from a resale.
• Buyer financing and timing: HUD's property flipping rules for FHA-insured loans say a property resold within 90 days of acquisition is not eligible for FHA mortgage insurance unless an exemption applies. HUD also requires a second appraisal in some resales made 91 to 180 days after acquisition when the new price meets a set threshold. Because that can narrow your pool of buyers, ask a lender how your timeline would interact with buyer financing. HUD Handbook 4000.1 has the full details.
• Tax and legal treatment: Ask a tax professional and an attorney how a sale, a rental or a long hold would be treated before you choose a structure.
• Plan B: Write down the price, date or condition at which you would change course, such as reducing the price or switching to a rental, and what that would cost.

8. Go / no-go questions

Answer these honestly. A "no" or an "I'm not sure" is a reason to pause, not a reason to guess.

• Do I have a written scope and itemized bids that match it?
• Have I confirmed permit and inspection requirements with the building department?
• Have I verified every contractor's license status and classification with DOPL?
• Did a qualified inspector and any needed specialists review the property?
• Have I checked title, liens, HOA rules, zoning and insurance availability?
• Does my budget include financing, holding, selling, tax and reserve costs, not just construction?
• Could I carry the project if it runs much longer than planned?
• Do I have a primary exit and a documented backup?
• Have my lender, tax professional and attorney reviewed the parts that are theirs?

9. Common questions

10. Official references

These public sources are linked for further reading. Rules and web pages change, so confirm current details directly with the agency.

• Consumer Financial Protection Bureau: Schedule a home inspection
• Consumer Financial Protection Bureau: Find the right home (contingencies and insurance)
• U.S. Department of Housing and Urban Development: Property flipping rules for FHA-insured loans
• Utah Division of Professional Licensing: Contracting
• Utah Division of Professional Licensing: Residential Construction Agreement
• Utah Code Title 15A: State Construction and Fire Codes Act
• Utah Code Title 58, Chapter 55: Utah Construction Trades Licensing Act