real estate flip

A Flipper’s Retirement – An Oxymoronic Phrase

by Jeff Brown | June 28, 2011

Over the years I’ve benefitted by flipping various kinds of real estate. In fact, the only category I haven’t rehabbed for a profit is a house. 2-4 units, small apartment buildings, even a medical building once. In fact, that one was my favorite. I’m not the flipping type, but those who do it well have [...]

2 comments Read the full article →

Real Estate Wholesaling

Newbie Wholesalers: READ THIS!

by J Scott | February 23, 2011

I get a lot of emails and phone calls from newbie wholesalers who are looking to do their first deal (and very few that are actually experienced). Most of the time, they want to run a deal past me that is too thin or for some other reason just doesn’t fit my style of investing. [...]

6 comments Read the full article →

Flipping Houses

8 Ways to Find Great Areas to Flip Houses & Quick Sale Real Estate Tips

by Ryan Moeller | October 13, 2010

We completed a successful flip in a high end blue collar area and it went perfectly. It was a 70% LTV deal and we made a nice annualized return (tip #5). The property was in a suburb just outside of a great rental area, we categorize this area as a high end blue collar area [...]

2 comments Read the full article →

Flipping Houses

The “Affordable Custom Home” Real Estate Rehabber/Investor Niche?

by Ryan Hartman | December 6, 2009

When I was active as a Realtor working primarily with investors in Philadelphia, most of my business revolved around finding “Propertunities” for investors to rehab and hold or sell for a modest profit, usually in the that 100-200k range where there were always plenty of buyers. Of course, one of the most stressful stages of [...]

9 comments Read the full article →

Real Estate Investing

5 Steps to Calculating the Purchase Price for a Rehab Property

by Justin Pierce | October 18, 2009

Knowing what to pay for a home is critical in the rehabbing game. I’ve come up with my own method for determining my purchase price for a property. While I don’t think my method will work for everybody, maybe it will give you a good place to start or perhaps, some new ideas.

There are a lot of different variables that you’ll have to take into account on any specific deal; I’m interested to know from other rehabbers how their math looks.

Calculating the Purchase Price for a Rehab Property

Step 1: Know the value of the property. – That is the resale, after repairs value of the home. Make sure you view actual recent comparable sales. Once I feel confident I know what a property is worth I deduct 26% from that price. 20% is what I like to shoot for in a profit. With the market firming up here lately I’ve been cutting that margin to 16% on real good deals. On bigger deals or on deals that feel a little more risky I stay firm with the 20%. I wouldn’t go much lower than 16%.

Historically homes sell on average for something around 8% less than asking price. If you’re only pricing in a 10% profit then you might end up just doing a practice flip. A practice flip is a deal where you don’t make any money. Essentially you donate all of your time and effort for free to the end home buyer. The other 6% is the number I put in for closing costs when I sell the home. I’m a licensed Realtor so I list the home myself, which will save me a little. So in my case, 4% goes to Realtor fees and the other 2% is what I budget for other closing costs. You can choose to try to sell the home yourself and save the Realtor commission. If you are not a Realtor and you plan on hiring a Realtor then you probably will need to budget 6% for the Realtor fees plus another 2-3% for closing costs. I always anticipate having to pay some of my buyers closing costs.

17 comments Read the full article →