What do you guys think about low $ flips?

6 Replies

Would you or have you ever flipped a house with an ARV of 75K or less.

My thoughts. Smaller margins. Different pool of buyers. Different materials and finishes. In the lower price point/areas properties could be marketed to first time buyers as well as investors as rentals. 

I have a buddy who is interested in this niche who has 75k on a HELOC.

Ryan Dossey, Real Estate Agent in IN (#RB15001099)

75K and a good deal should be enough to get a hard money lender interested.  Flipping generally works better at the "mid-high" price points.  

Running the numbers even at a 80% ratio and repairs around 20K, you are looking at only being able to pay 40K or less.  So it may be a big challenge to find properties at that price.

Good point @Jesse T. I do have a portfolio lender who will loan me 80% ltv and 100% of rehab costs. Way cheaper/easier than any HML. I think I would rather go that way so even on a "smaller" house he has less at risk.

Ryan Dossey, Real Estate Agent in IN (#RB15001099)

Originally posted by @Ryan Dossey :

Would you or have you ever flipped a house with an ARV of 75K or less.

My thoughts. Smaller margins. Different pool of buyers. Different materials and finishes. In the lower price point/areas properties could be marketed to first time buyers as well as investors as rentals. 

I have a buddy who is interested in this niche who has 75k on a HELOC.

The challenge w/ flipping a property w/ that low a price point is the unforeseen $10K gotcha that eats into your profits margin.  For us this makes [email protected] this price point a high risk.   W/ that said- occasionally we've run in to properties, that support that strategy so you shouldn't overlook it.

That's how I started...

Still good money to be made as long as he gets a good deal going in..

My biggest concerns were the break ins and vandalism in the not so premier neighborhoods..

My first flip I had to put a cyclone fence all the way around and board all the windows and doors when I wasnt there. Worked ok just a little extra work..

--Mike

I have done flips with an ARV under 80k. Just have to watch out for the surprises and do your homework. AND be happy with making 5k or 7k. I have no problem with that :)!

You guys have confirmed pretty much what I suspected. Thanks for the advice/stories!

Ryan Dossey, Real Estate Agent in IN (#RB15001099)

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