BiggerPockets

Michael,
The answer to your question is not simple or one size fits all. For instance, how are you flipping the property? Do you use your own money then resell? If so, I would personally want a higher return as I am "risking" my own capital, plus I want a return on my money + the return for the efforts of the flip, be it a retail or wholesale deal. If you flip without using any of your money, you could take a lower amount as their is less financial risk to you personally and you could make up for a lower profit with higher volume. You will also get less for a wholesale deal than a retail one.

For a $50k-$100k property that I flip without using my own money, I would accept $4,000-$10000, depending on the situation.

For a home I buy with cash, fix, then flip, I want a minimum of $20k.

j scott, michael asked the original question.....will was the one that answered.

From the retail side, I have never "wholesaled" only bird dogged...

The most I have ever made on a flip is 90k (after it was all said and done) and the least is I broke even. (that was a BIG learning experience & only happened ONCE).

Learn your market areas. study them well. I have bought as low as 22% ARV. It takes me LONGER to find those deals but it is worth it at the end. My recipe for successful retail flips:
1- research area
2- price BEFORE purchase...comps (DOM,PRICE)-10,000 (for me) = $sell quicker
3- EXAMPLE Scenario: 100,000 ARV
Purchase: 25k
Rehab: 15k (basic)
Total: $40k
Sell quick $90k (depending on comps/ consider DOM & actual sale prices BEFORE you buy)
Profit $50k - realtor fees, transfer taxes, etc...around $42k after everyone else gets their cut.
WITH the bank, subtract another 5k + further reducing profits.

My personal preference is using your own cash. You save a lot of fees and interest to the UNDESERVING banks. Most important when using your cash is don't pinch yourself too close. Factor in job loss (if you work full time), at least 6 mos of expenses and unforeseen issues with the property you would like to flip. I like to keep 20k for unforeseens back JUST IN CASE.

I think 20k profit is too small of a margin considering all of the expenses unless you can have it done and sold within a month or two.

Good luck!

Thanks for pointing that out Josh!

And sorry Will!

I made $24k on my last flip. So I would have to agree, if it's not $20k and up I'm not interested and I'll just pass it on to another investor. But that's just me. ;-)

Why would anyone risk their own money (or credit for that matter)?

It's so easy to just take a house under contract or just have it deeded to you.

If you're wholesaling a house that needs repairs, just get a contract to buy the property with a small deposit (less than $100), and then run an ad for the house in the real estate investment section of the newspaper or craigslist. Assign the contract to the rehabber and walk away with $10-$20K.

If you're flipping a nice house in good repair, either get the deed and sell it or owner finance it, or get an option to buy the house (if it's really nice, worth $700K or more value) for a low price and sell the option for a higher price.

Never risk your own money except for small deposits and marketing.

With an REO or short sale, you can just get a private money lender with the house as collateral. It shouldn't be hard to get the money if it's as good of an investment as you say. If you can't get the private money, then the it's too risky.

I, personally, don't do rehabs. I don't want to be tied up in the house for months. But if I did do rehabs, again, I'd have a private money source for it. And there would be a large enough spread to include repairs in that money. That way, if I mess up, they just get the house, and I've only lost time, not money.

I can agree we should agree to disagree, but not until I can get another word in :)

I don't expect to have to give a lot (or any) houses to the private lender. It's just that IF I completely messed everything up on the house and I couldn't at least break even on it, I'd much rather not lose my money on it.

I'm not looking at making risky investments (even using someone else's money). I want the sure things. But if something ever did happen, then I'd be safe.