flip rehabs/returns - how do i compete?

Member since 2020 · 68 posts · 30 votes

i am having trouble competing with other flippers. i try to do things the right way (pull permits) & use contractors/hvac/plumbing/electricians who, i feel, give me the best bang for the buck. and we all know the cost of things, and labor, have risen dramatically lately.

i pay cash for my homes and hit the sales price i anticipated beforehand.

the problem i am having is getting my rehab numbers in line. i feel other investors are doing rentals or doing some/all the work themselves and/or not pulling permits.

i should also mention, i do not need to flip. i can live off the returns i get in my bond/stock portfolio (w/ a lot less taxes paid). however, i like to flip 1x/year to keep me from getting bored and get that satisfaction from "working" (i retired 4 years ago).

and no, i am not interested in doing rentals. :)

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Andy SabischPro Member

Investor · Jackson, MS · Member since 2021 · 660 posts · 561 votes

What permits are required depends on your specific location - some areas are more lenient than others. With that said, yes, flippers can and do a lot of the work themselves to save costs but that all comes with a potential downside. If a permit is required and was not pulled, you can be red tagged and then you will have an inspector on your back until the project is done and likely on future projects. Another downside if if you sell the house and permits were not pulled and there is an issue with one of the systems that required one, you as the flipper can be legally liable for having done the work uninsured and without a permit. I find it a lot easier and less stressful to get a licensed trades person to pull a permit for jobs where it is required than cut costs and not. I have had trades people quote me two prices - one with permits and one without. I tend to find another person to do the work. I understand that in many cases the local inspector knows far less than the person that did the work but at least it was permitted and inspected.

If your numbers are coming in where you want them and the profit is there, I would not worry about the corners other flippers are cutting as it sounds like you are doing it the right way.

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Ronald Ty
OP
Member since 2020 · 68 posts · 30 votes
3y
The typical appreciation is 2-3% over the past 100 years. That's not appealing to me. I sold 2 of my rentals and will sell 1 more this year. Then, I'm out.
I can live off of my mutual funds. I do this for fun and to keep from getting bored. This flip is only about 3% of my net worth excluding my primary residence.
0 Reply
Cindy Bowman
Real Estate Agent · Harrisburg, NC · Member since 2014 · 121 posts · 44 votes
3y
https://www.charlottestories.c...
Interesting article about RE Investors in the Charlotte market. All the deals I have looked at are priced way too high to make a profit. Don't know who is buying them. Also as a real estate agent, I can say in NC pulling permits is a MUST. You would be setting yourself up for all types of problems without them.
2 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
3y
Quote from @Ronald Ty:

The typical appreciation is 2-3% over the past 100 years. That's not appealing to me. I sold 2 of my rentals and will sell 1 more this year. Then, I'm out.
I can live off of my mutual funds. I do this for fun and to keep from getting bored. This flip is only about 3% of my net worth excluding my primary residence.

This particular market is changing from long history of oversupply to a very limited supply, the pattern in this market is pretty unusual. I would guess the future appreciation from this zipcode is going to be very strong.

In the last 10 years however, this zip code is laggards to US nationwide appreciation rate. I would not be surprise if market is reaching 600-700k in this zip code after five years. I tell you this not to make you happy LOL but I guess it seems you made the right kind of investment in the right time as well.
0 Reply
Ronald Ty
OP
Member since 2020 · 68 posts · 30 votes
3y
How do you know this? You don't even know the zip code. This is in cook county where property taxes are insane. People are leaving this state in droves. Wish I could but my wife wants to stay.
0 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
3y
Quote from @Ronald Ty:

How do you know this? You don't even know the zip code. This is in cook county where property taxes are insane. People are leaving this state in droves. Wish I could but my wife wants to stay.

Is this is Arlington Heights, IL ?

I checked the internal market statistic especially inventory supply. That's the indicator for future appreciation.

I usually purchase in the market where supply is reducing in consistent way, it's hidden money printer.
1 Reply
Ronald Ty
OP
Member since 2020 · 68 posts · 30 votes
3y
Quote from @Cindy Bowman:

https://www.charlottestories.c...
Interesting article about RE Investors in the Charlotte market. All the deals I have looked at are priced way too high to make a profit. Don't know who is buying them. Also as a real estate agent, I can say in NC pulling permits is a MUST. You would be setting yourself up for all types of problems without them.

You'd be surprised how many investors don't pull permits and some of the work they do. I HATE the government. It's so stupid. The building depth failed me cuz I didn't have their stamps on my scope of work. It was done I just didn't print out a copy as too much paperwork and their nuisance nonsense. I pointed out to then the permit is in the window and I have the receipt for the $1000 I paid you people. "Nope, can't inspect today. Sorry."
1 Reply
Naum Raz
Investor · Brooklyn, NY · Member since 2016 · 56 posts · 40 votes
3y
I am not familiar with your market too much but I would ask the following question. Is it worth for me to stay in the this market or stay in this business? What I meant by that is, just because people are flipping properties it doesn't make it a good to flip. Maybe they're overpaying and will lose money. Just like stocks, some people were buying stocks or bitcoin at top prices and investing in NFTs and it was almost impossible to compete with them but that didn't make it right to compete with them. At the end many of those people lost lots of money. Saying all this I am sure you can still find deals by adapting such as thinking outside the box and changing strategy. I know many flippers are loosing money now. So perhaps it would be good idea to consider either exiting the market for now or coming up with a new strategy.
0 Reply
Matthew Paul
Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
3y
A good friend flips houses , he does the bare minimum to make the house move in condition . He sells in B areas . He uses builder grade , makes the house affordable and does it fast . His belief is let the new owner customize to their taste . His houses sell based on location , and they sell quick . He sells FSBO and makes a great return .
0 Reply
Ronald Ty
OP
Member since 2020 · 68 posts · 30 votes
3y
Quote from @Matthew Paul:

A good friend flips houses , he does the bare minimum to make the house move in condition . He sells in B areas . He uses builder grade , makes the house affordable and does it fast . His belief is let the new owner customize to their taste . His houses sell based on location , and they sell quick . He sells FSBO and makes a great return .
I have seen someone do that. They sprayed the original Indoor doors blue & kept all the original windows (60 years old). I also saw another flip where the home had some real issues. He did the basics & sold it as is. I find most who now flip do most of the work themselves. I can't compete with that. But this is just a hobby for me. Still, I obviously wanna get a good return. Plus, the taxes are so much higher than on a long term capital gain on stock index mutual funds. I need to find a different hobby lol
0 Reply
Todd Jones
Member since 2023 · 243 posts · 199 votes
3y
Quote from @Matthew Paul:

A good friend flips houses , he does the bare minimum to make the house move in condition . He sells in B areas . He uses builder grade , makes the house affordable and does it fast . His belief is let the new owner customize to their taste . His houses sell based on location , and they sell quick . He sells FSBO and makes a great return .

…and this is how flippers make their numbers.

Almost all flippers in my area use this formula so it looks good in internet pictures. They select the lowest cost options from Home Depot such as the gray flooring. The interior is painted gray and the lowest cost stainless steel appliances.

Their philosophy: “It’s better that what was there. Build it up to code. If they don’t like it, they can change it.”
However, due to the quick turn and choice of builder’s grade carpet and other materials, it doesn’t last.

@Ronald Ty, the trick is, you’re putting pride and quality in your flip where the buyer is getting a “home” that will last for several decades. The competition are flipping “property” where they will sell, profit, and move on. If the driveway is uneven but still meets the city’s code, the competition leaves it.

Sounds like your flip will be "best on the block". If true, your ARV will be more. Stage it and it will be a prize.

So to answer your original question of “How do I compete?”, flip/stage the home look so breath taking so there is no competition. Have it where your Zillow post has several favorites. Buyers see the pics and say “Ooooh my!!! Yea it’s a higher price…but look at!”

At the end, you can make profit, have a great reputation , and look back and say “Yea…I did that.”
2 Reply
Gary L Wallman
Rental Property Investor · Beavercreek OH · Member since 2018 · 422 posts · 970 votes
3y
Quote from @Ronald Ty:

i am having trouble competing with other flippers. i try to do things the right way (pull permits) & use contractors/hvac/plumbing/electricians who, i feel, give me the best bang for the buck. and we all know the cost of things, and labor, have risen dramatically lately.

i pay cash for my homes and hit the sales price i anticipated beforehand.

the problem i am having is getting my rehab numbers in line. i feel other investors are doing rentals or doing some/all the work themselves and/or not pulling permits.

i should also mention, i do not need to flip. i can live off the returns i get in my bond/stock portfolio (w/ a lot less taxes paid). however, i like to flip 1x/year to keep me from getting bored and get that satisfaction from "working" (i retired 4 years ago).

and no, i am not interested in doing rentals. :)

Scott,
These from the ground up flips, particularly with structural changes, are what nightmares are made of. Especially true if your using contractors who likes to charge the way yours do. I have done many higher end finishes in flips and your numbers shock me. Not to say your wrong, inflation in building materials has been crazy.
After doing dozens of flips, I now avoid any of these rebuild from the ground up stuff. If I can't make it appealing by kitchen, bath, paint, flooring and some fancy lighting, I don't do it. Too expensive and way too risky for the dollars expended, to the return.
I've also learned most buyers look at fit and finish more than the houses bones.
Gary
0 Reply
Ronald Ty
OP
Member since 2020 · 68 posts · 30 votes
3y
Quote from @Gary L Wallman:

Quote from @Ronald Ty:

i am having trouble competing with other flippers. i try to do things the right way (pull permits) & use contractors/hvac/plumbing/electricians who, i feel, give me the best bang for the buck. and we all know the cost of things, and labor, have risen dramatically lately.

i pay cash for my homes and hit the sales price i anticipated beforehand.

the problem i am having is getting my rehab numbers in line. i feel other investors are doing rentals or doing some/all the work themselves and/or not pulling permits.

i should also mention, i do not need to flip. i can live off the returns i get in my bond/stock portfolio (w/ a lot less taxes paid). however, i like to flip 1x/year to keep me from getting bored and get that satisfaction from "working" (i retired 4 years ago).

and no, i am not interested in doing rentals. :)

Scott,
These from the ground up flips, particularly with structural changes, are what nightmares are made of. Especially true if your using contractors who likes to charge the way yours do. I have done many higher end finishes in flips and your numbers shock me. Not to say your wrong, inflation in building materials has been crazy.
After doing dozens of flips, I now avoid any of these rebuild from the ground up stuff. If I can't make it appealing by kitchen, bath, paint, flooring and some fancy lighting, I don't do it. Too expensive and way too risky for the dollars expended, to the return.
I've also learned most buyers look at fit and finish more than the houses bones.
Gary
Thanks for the feedback. Agree to disagree. Dont feel I'm being ripped off. And creating value raises the arv. Spend $ to make $. I have done very few cosmetic flips. I haven't really ever gotten crazy returns. It's better just to put it in a stock mutual fund Roth Ira and call it a day. Everybody thinks it's easy. I'm here to tell the newbs it is not. Again, this is for educational purposes.
0 Reply
Gary L Wallman
Rental Property Investor · Beavercreek OH · Member since 2018 · 422 posts · 970 votes
3y
Quote from @Ronald Ty:

Quote from @Gary L Wallman:

Quote from @Ronald Ty:

i am having trouble competing with other flippers. i try to do things the right way (pull permits) & use contractors/hvac/plumbing/electricians who, i feel, give me the best bang for the buck. and we all know the cost of things, and labor, have risen dramatically lately.

i pay cash for my homes and hit the sales price i anticipated beforehand.

the problem i am having is getting my rehab numbers in line. i feel other investors are doing rentals or doing some/all the work themselves and/or not pulling permits.

i should also mention, i do not need to flip. i can live off the returns i get in my bond/stock portfolio (w/ a lot less taxes paid). however, i like to flip 1x/year to keep me from getting bored and get that satisfaction from "working" (i retired 4 years ago).

and no, i am not interested in doing rentals. :)

Scott,

These from the ground up flips, particularly with structural changes, are what nightmares are made of. Especially true if your using contractors who likes to charge the way yours do. I have done many higher end finishes in flips and your numbers shock me. Not to say your wrong, inflation in building materials has been crazy.

After doing dozens of flips, I now avoid any of these rebuild from the ground up stuff. If I can't make it appealing by kitchen, bath, paint, flooring and some fancy lighting, I don't do it. Too expensive and way too risky for the dollars expended, to the return.

I've also learned most buyers look at fit and finish more than the houses bones.

Gary

Thanks for the feedback. Agree to disagree. Dont feel I'm being ripped off. And creating value raises the arv. Spend $ to make $. I have done very few cosmetic flips. I haven't really ever gotten crazy returns. It's better just to put it in a stock mutual fund Roth Ira and call it a day. Everybody thinks it's easy. I'm here to tell the newbs it is not. Again, this is for educational purposes.

Not disagreeing with your idea that it takes money to make money. Just disagreeing with your rate of return, which, I believe you were concerned about in your post. I've learned, after being in the flip business and the car business, I can't compete with the car manufacturer or the Real Estate developer. If I have to rebuild a car or a house, it's usually a loser for me. Real money is made by making an ugly house look pretty, not leveling garage floors. IMHO.
Respectfully,
Gary
2 Reply
Branden Jordan
Investor · Member since 2020 · 67 posts · 28 votes
3y
Quote from @Chris Seveney:

@Scott Williamson
It’s not about the permits - are you referring to more unlicensed contractors
Also we are seeing fix and flips in our area and now having dramatic price drops so they are not making any money. I think that is more the case than anything

You are in "Northern VA" according to BP. I assume you are speaking of "dramatic price drops" in that area. Can you give a real-life example of said drops? I am curious about what different market areas are experiencing such drops to have an investor honestly make "any money".
0 Reply
Branden Jordan
Investor · Member since 2020 · 67 posts · 28 votes
3y
Quote from @Carlos Ptriawan:

Quote from @Ronald Ty:

How do you know this? You don't even know the zip code. This is in cook county where property taxes are insane. People are leaving this state in droves. Wish I could but my wife wants to stay.

Is this is Arlington Heights, IL ?

I checked the internal market statistic especially inventory supply. That's the indicator for future appreciation.

I usually purchase in the market where supply is reducing in consistent way, it's hidden money printer.

Please explain "internet market statistic."

Can you give an example of a market where supply is reducing?
0 Reply
Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
3y
Quote from @Branden Jordan:

Quote from @Chris Seveney:

@Scott Williamson

It’s not about the permits - are you referring to more unlicensed contractors

Also we are seeing fix and flips in our area and now having dramatic price drops so they are not making any money. I think that is more the case than anything

You are in "Northern VA" according to BP. I assume you are speaking of "dramatic price drops" in that area. Can you give a real-life example of said drops? I am curious about what different market areas are experiencing such drops to have an investor honestly make "any money".
7e investments53 Reviews
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Branden Jordan
Investor · Member since 2020 · 67 posts · 28 votes
3y
Quote from @Matthew Paul:

A good friend flips houses , he does the bare minimum to make the house move in condition . He sells in B areas . He uses builder grade , makes the house affordable and does it fast . His belief is let the new owner customize to their taste . His houses sell based on location , and they sell quick . He sells FSBO and makes a great return .

How do you determine "B areas?" Is there a specific resource or platform you go to for this grade of any property?
0 Reply
Ronald Ty
OP
Member since 2020 · 68 posts · 30 votes
3y
Quote from @Gary L Wallman:

Quote from @Ronald Ty:

Quote from @Gary L Wallman:

Quote from @Ronald Ty:

i am having trouble competing with other flippers. i try to do things the right way (pull permits) & use contractors/hvac/plumbing/electricians who, i feel, give me the best bang for the buck. and we all know the cost of things, and labor, have risen dramatically lately.

i pay cash for my homes and hit the sales price i anticipated beforehand.

the problem i am having is getting my rehab numbers in line. i feel other investors are doing rentals or doing some/all the work themselves and/or not pulling permits.

i should also mention, i do not need to flip. i can live off the returns i get in my bond/stock portfolio (w/ a lot less taxes paid). however, i like to flip 1x/year to keep me from getting bored and get that satisfaction from "working" (i retired 4 years ago).

and no, i am not interested in doing rentals. :)

Scott,

These from the ground up flips, particularly with structural changes, are what nightmares are made of. Especially true if your using contractors who likes to charge the way yours do. I have done many higher end finishes in flips and your numbers shock me. Not to say your wrong, inflation in building materials has been crazy.

After doing dozens of flips, I now avoid any of these rebuild from the ground up stuff. If I can't make it appealing by kitchen, bath, paint, flooring and some fancy lighting, I don't do it. Too expensive and way too risky for the dollars expended, to the return.

I've also learned most buyers look at fit and finish more than the houses bones.

Gary

Thanks for the feedback. Agree to disagree. Dont feel I'm being ripped off. And creating value raises the arv. Spend $ to make $. I have done very few cosmetic flips. I haven't really ever gotten crazy returns. It's better just to put it in a stock mutual fund Roth Ira and call it a day. Everybody thinks it's easy. I'm here to tell the newbs it is not. Again, this is for educational purposes.

Not disagreeing with your idea that it takes money to make money. Just disagreeing with your rate of return, which, I believe you were concerned about in your post. I've learned, after being in the flip business and the car business, I can't compete with the car manufacturer or the Real Estate developer. If I have to rebuild a car or a house, it's usually a loser for me. Real money is made by making an ugly house look pretty, not leveling garage floors. IMHO.
Respectfully,
Gary
Thanks, Gary. Just curious, what kind of return do you get on your flips assuming if you would be paying cash for instance ?
0 Reply
Gary L Wallman
Rental Property Investor · Beavercreek OH · Member since 2018 · 422 posts · 970 votes
3y
Quote from @Ronald Ty:

Quote from @Gary L Wallman:

Quote from @Ronald Ty:

Quote from @Gary L Wallman:

Quote from @Ronald Ty:

i am having trouble competing with other flippers. i try to do things the right way (pull permits) & use contractors/hvac/plumbing/electricians who, i feel, give me the best bang for the buck. and we all know the cost of things, and labor, have risen dramatically lately.

i pay cash for my homes and hit the sales price i anticipated beforehand.

the problem i am having is getting my rehab numbers in line. i feel other investors are doing rentals or doing some/all the work themselves and/or not pulling permits.

i should also mention, i do not need to flip. i can live off the returns i get in my bond/stock portfolio (w/ a lot less taxes paid). however, i like to flip 1x/year to keep me from getting bored and get that satisfaction from "working" (i retired 4 years ago).

and no, i am not interested in doing rentals. :)

Scott,

These from the ground up flips, particularly with structural changes, are what nightmares are made of. Especially true if your using contractors who likes to charge the way yours do. I have done many higher end finishes in flips and your numbers shock me. Not to say your wrong, inflation in building materials has been crazy.

After doing dozens of flips, I now avoid any of these rebuild from the ground up stuff. If I can't make it appealing by kitchen, bath, paint, flooring and some fancy lighting, I don't do it. Too expensive and way too risky for the dollars expended, to the return.

I've also learned most buyers look at fit and finish more than the houses bones.

Gary

Thanks for the feedback. Agree to disagree. Dont feel I'm being ripped off. And creating value raises the arv. Spend $ to make $. I have done very few cosmetic flips. I haven't really ever gotten crazy returns. It's better just to put it in a stock mutual fund Roth Ira and call it a day. Everybody thinks it's easy. I'm here to tell the newbs it is not. Again, this is for educational purposes.

Not disagreeing with your idea that it takes money to make money. Just disagreeing with your rate of return, which, I believe you were concerned about in your post. I've learned, after being in the flip business and the car business, I can't compete with the car manufacturer or the Real Estate developer. If I have to rebuild a car or a house, it's usually a loser for me. Real money is made by making an ugly house look pretty, not leveling garage floors. IMHO.

Respectfully,

Gary

Thanks, Gary. Just curious, what kind of return do you get on your flips assuming if you would be paying cash for instance ?

Scott,
I never use borrowed money. I'm in the Midwest so returns aren't spectacular. I used to shoot for between 25 and 40 percent cash on cash return in 3 to 4 months. The amount of work it took made me into a buy and hold guy.
Now own 150+ LTR doors.
Gary
0 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
3y
Quote from @Branden Jordan:

Quote from @Carlos Ptriawan:

Quote from @Ronald Ty:

How do you know this? You don't even know the zip code. This is in cook county where property taxes are insane. People are leaving this state in droves. Wish I could but my wife wants to stay.

Is this is Arlington Heights, IL ?

I checked the internal market statistic especially inventory supply. That's the indicator for future appreciation.

I usually purchase in the market where supply is reducing in consistent way, it's hidden money printer.

Please explain "internet market statistic."

Can you give an example of a market where supply is reducing?

Kihei, Maui in Hawaii, has deteroting supply between 2018 to 2021 while demand increases.

Kihei,Maui at the same time has super high acceleration growth on the same time frame, perhaps #1 highest accelarated market in history for this time around. Supply then stabilizes after 2021 (in single digit number).
0 Reply
Branden Jordan
Investor · Member since 2020 · 67 posts · 28 votes
3y
Quote from @Carlos Ptriawan:

Quote from @Branden Jordan:

Quote from @Carlos Ptriawan:

Quote from @Ronald Ty:

How do you know this? You don't even know the zip code. This is in cook county where property taxes are insane. People are leaving this state in droves. Wish I could but my wife wants to stay.

Is this is Arlington Heights, IL ?

I checked the internal market statistic especially inventory supply. That's the indicator for future appreciation.

I usually purchase in the market where supply is reducing in consistent way, it's hidden money printer.

Please explain "internet market statistic."

Can you give an example of a market where supply is reducing?

Kihei, Maui in Hawaii, has deteroting supply between 2018 to 2021 while demand increases.

Kihei,Maui at the same time has super high acceleration growth on the same time frame, perhaps #1 highest accelarated market in history for this time around. Supply then stabilizes after 2021 (in single digit number).

That seems like an extreme example and an outlier of the norm. I think Hawaii and Alaska will be different for whatever reason.
0 Reply
Rafael Castro
Real Estate Investor · San Leandro, CA · Member since 2017 · 16 posts · 6 votes
3y
Quote from @Ronald Ty:

i am having trouble competing with other flippers. i try to do things the right way (pull permits) & use contractors/hvac/plumbing/electricians who, i feel, give me the best bang for the buck. and we all know the cost of things, and labor, have risen dramatically lately.

i pay cash for my homes and hit the sales price i anticipated beforehand.

the problem i am having is getting my rehab numbers in line. i feel other investors are doing rentals or doing some/all the work themselves and/or not pulling permits.

i should also mention, i do not need to flip. i can live off the returns i get in my bond/stock portfolio (w/ a lot less taxes paid). however, i like to flip 1x/year to keep me from getting bored and get that satisfaction from "working" (i retired 4 years ago).

and no, i am not interested in doing rentals. :)

Keep doing things the right way. Other investors cutting corners/not pulling permits etc? That’s good for you, quality stands out.
1) buy better deals with more room in them. Easier said than done.
2) Maybe it’s time to start getting competing bids from multiple contractors. You could even poach the contractors your investors are using. I can show you how
1 Reply
Matthew Paul
Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
3y
Quote from @Branden Jordan:

Quote from @Matthew Paul:

A good friend flips houses , he does the bare minimum to make the house move in condition . He sells in B areas . He uses builder grade , makes the house affordable and does it fast . His belief is let the new owner customize to their taste . His houses sell based on location , and they sell quick . He sells FSBO and makes a great return .

How do you determine "B areas?" Is there a specific resource or platform you go to for this grade of any property?

Good schools , higher priced homes ,, low crime .
0 Reply
Alena Beecher-Ritchie
Real Estate Agent · Roswell, GA · Member since 2023 · 19 posts · 13 votes
3y
I see you have a marketing budget of $500 that includes staging. Please make sure that you hire the best photographer in the area. And that your exterior presentation is on point. You will need to make the best first impression.
0 Reply
Ronald Ty
OP
Member since 2020 · 68 posts · 30 votes
3y
Quote from @Gary L Wallman:

Quote from @Ronald Ty:

Quote from @Gary L Wallman:

Quote from @Ronald Ty:

Quote from @Gary L Wallman:

Quote from @Ronald Ty:

i am having trouble competing with other flippers. i try to do things the right way (pull permits) & use contractors/hvac/plumbing/electricians who, i feel, give me the best bang for the buck. and we all know the cost of things, and labor, have risen dramatically lately.

i pay cash for my homes and hit the sales price i anticipated beforehand.

the problem i am having is getting my rehab numbers in line. i feel other investors are doing rentals or doing some/all the work themselves and/or not pulling permits.

i should also mention, i do not need to flip. i can live off the returns i get in my bond/stock portfolio (w/ a lot less taxes paid). however, i like to flip 1x/year to keep me from getting bored and get that satisfaction from "working" (i retired 4 years ago).

and no, i am not interested in doing rentals. :)

Scott,

These from the ground up flips, particularly with structural changes, are what nightmares are made of. Especially true if your using contractors who likes to charge the way yours do. I have done many higher end finishes in flips and your numbers shock me. Not to say your wrong, inflation in building materials has been crazy.

After doing dozens of flips, I now avoid any of these rebuild from the ground up stuff. If I can't make it appealing by kitchen, bath, paint, flooring and some fancy lighting, I don't do it. Too expensive and way too risky for the dollars expended, to the return.

I've also learned most buyers look at fit and finish more than the houses bones.

Gary

Thanks for the feedback. Agree to disagree. Dont feel I'm being ripped off. And creating value raises the arv. Spend $ to make $. I have done very few cosmetic flips. I haven't really ever gotten crazy returns. It's better just to put it in a stock mutual fund Roth Ira and call it a day. Everybody thinks it's easy. I'm here to tell the newbs it is not. Again, this is for educational purposes.

Not disagreeing with your idea that it takes money to make money. Just disagreeing with your rate of return, which, I believe you were concerned about in your post. I've learned, after being in the flip business and the car business, I can't compete with the car manufacturer or the Real Estate developer. If I have to rebuild a car or a house, it's usually a loser for me. Real money is made by making an ugly house look pretty, not leveling garage floors. IMHO.

Respectfully,

Gary

Thanks, Gary. Just curious, what kind of return do you get on your flips assuming if you would be paying cash for instance ?

Scott,
I never use borrowed money. I'm in the Midwest so returns aren't spectacular. I used to shoot for between 25 and 40 percent cash on cash return in 3 to 4 months. The amount of work it took made me into a buy and hold guy.
Now own 150+ LTR doors.
Gary
I don't get it. How is a 25-40% return not spectacular ? Especially in 4 months? Compounded (if you do 3 a year), that was/is 75-120%!
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