How much profit do flippers want?

Question

Hey everyone!

You guys have been so helpful answering my questions. I have learned a lot so far from asking through these posts. My new topic of the day to get answers for as a wholesaler....

When wholesaling to rehabbers- what is the range of profit they look for ARV?

What are the typical calculations flippers use to see if your MAO to flipper is a good deal..How do rehabbers/me in general calculate the associated carrying cost.. such as taxes, utilities, etc per month. I'd love to see a break down as a rehabber the process used to better understand how I can make sure to find great deals and pass them along to rehabbers.

Thanks for your help guys!

Account Closed · Answer

my goal is 20% of Arv after all costs including realtor commissions.

Josh Miller · Answer

My range varies depending on the value of the property.   For ~$100k homes I purchase at no more than 65 cents on the dollar of As-Is condition.

John Mathewson · Answer

@Matthew Sullivan As a flipper myself we typically look for a 30% return after all commissions and closing costs.

Nick C. · Answer

Every flipper is different, although most follow the same principles somewhat. A good starting point is at least a 20% ROI on the project. That goes up depending on how large the project is, or how large of a dollar amount is risked. Some shoot for a minimum dollar amount.

Taxes can be prorated for the projected length of the project. Most carrying costs, utilities, insurance, lender costs, is going to change depending on the property and the flipper. Your best bet is to ask each individual. You'd be surprised how differently everyone comes up with their numbers.