What is your magic numbers for fix&flips?

[Anson Young]

I'm interested to hear others talk about where they like to land their numbers for fix and flip projects. Some guys will only look at the deal if it has $50k of room after fix up, some guys are happy making $10-15k per deal and moving on.

What are your magic numbers? 1/2 of ARV? ARV minus 25% minus fixup? ?

For example, another partner of mine wont touch a deal if it dosnt have $30k profit (ARV - fixup/closing costs/realtor fees/holding costs/purchase = $30k to him). I'm in the $20k minimum camp, 10-15k is cutting it close incase something goes wrong...

We start the calculation with ARV minus 25% minus fixup = purchase price. Then break it down further, ARV minus fixup/closing costs/realtor fees/holding costs/purchase = potential profit. Hasnt failed yet with the 7 we have finished this year.

How about you?

[Stephen McKee]

Try going backwards

Estimated sales price
-
Cost to sell (I use 8%)
-
Repairs (contractor estimate)
-
Cost to purchase (I use 2%)
-
6 months interest (based on total out of pocket)
-
How much money you want to make (I use 25-30%)
=
Max offer price.