what is your target flip profit

Question

What is your target flip profit on a lipstick flip(10-15k renovation tops) on a property with arv of 220,000. looking at a property in seminole heights tampa florida.

Michael Haynes · Answer

Hello Sean Drees. I think Spec Home Builders shoot for a 20% profit. Trying to get 10% out of Seminole Heights properties on the West side of I275 in a Flip is tough. That is why the Flippers moved to the East side of I275 three years ago and bought crap to sell for $200 > <. If you look in your area of choice and price a New Home you may find that you can buy Brand New...3/2 with a Garage for $250,000. Why would you buy a 1950's wood frame, 3/1 without a Garage that is fixed up for $250,000 or < less? This is what happened ten years ago South of Kennedy Ave. The Builders and Flippers built out the East Side of Dale Mabry and two years ago they started on the West side which is slowly being worked on now because the value of the lots went up to $120,000 for a tear down on the East Side. Your a suit and tie guy...would you live on the East Side of I275? I never bought a longterm Rental that I would not live in.

Edgar Rodriguez · Answer

@Sean Drees

I generally suggest at least 10% net profit after selling costs and commissions.

However, that depends on the risk of the deal and how solid the ARV is.

In your situation, that would mean at least $20,000.

There are so many unknown factors with flipping that you have a good buffer there.