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Carlos Garcia
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Whats the minimum net to do a Flip?

Carlos Garcia
Pro Member
Posted Dec 14 2022, 11:00

What is the least amount of money I should net when doing a Flip?

I was thinking around $30k to leave room for surprises and changes in the market?

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Kenny Smith
  • Real Estate Agent
  • Denver, CO
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Kenny Smith
  • Real Estate Agent
  • Denver, CO
Replied Dec 14 2022, 11:39

@Carlos Garcia

I wouldn't look at it from a flat number, but more of a percentage. As homes get more expensive, so does your risk if the market flips. As an agent, with the market constantly changing, I'd say at minimum 10% of the ARV.

Best of luck!

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Nathan Gesner
  • Real Estate Broker
  • Cody, WY
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Nathan Gesner
  • Real Estate Broker
  • Cody, WY
ModeratorReplied Dec 15 2022, 06:16
Quote from @Carlos Garcia:

What is the least amount of money I should net when doing a Flip?

I was thinking around $30k to leave room for surprises and changes in the market?

Changes with everyone. For some people, $30,000 is a lot of money. Others won't touch a property that produces less than $100,000 profit. It also depends on how much you've invested. It wouldn't make sense to invest $3,000,000 in a property that only earns $30,000 in profit. And what about margins? If the market drops 10% on a $100,000 home, you will only earn $20,000 profit. If the market drops 10% on a $500,000 home, you will lose $20,000.

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Eliott Elias#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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Eliott Elias#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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Replied Dec 15 2022, 06:36

Do you want to net 30k on a million dollar flip? I suggest 20% 

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Scott E.
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Scott E.
  • Developer
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Replied Dec 15 2022, 06:56

Minimum 10%. I aim for ~10% on the clean, simple, quick flips that I know I can get done in a 6 months and I know will sell fast.

If I'm getting into a bigger deal that will take longer and will have a smaller buyer pool in the end, I aim for 20%+.

(With that being said, on flips I actually haven't ever looked at profit as a percentage. I just underwrite each deal and then proceed if the dollar profit number lines up with the effort and risk. But I did the math on my past couple flips and they've all ended up in the 10-20% range.)