Profit from flips if I have 250 K capital

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Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
2y

@John Mason

I think it's less about the capital, than about your experience, your network, and your plan

That is certainly more than a lot of folks have if it is truly cash and not borrowed / strings attached

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  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    2y

    @John Mason

    I think it's less about the capital, than about your experience, your network, and your plan

    That is certainly more than a lot of folks have if it is truly cash and not borrowed / strings attached

    4Reply
  • Alan F.
    Flipper/Rehabber · CA · Member since 2023 · 1k+ posts · 1k+ votes
    2y
    Quote from @John Mason:

    Good morning

    If I have  250 K capital , can I make 120 K a year from flipping?

    Thanks in Advance


     Definitely possible, margins × volume. In some markets you could do 250k pre tax off 1 flip, others will require a higher volume of flips. Acquisition, execution, disposition. Flipping is , IMHO, running a business. So many basic business tennants are applicable in flipping. Theres many benefits being well capitalized. 

    1Reply
  • John Mason
    OP
    Member since 2024 · 1k+ posts · 351 votes
    2y

    @Alan

    Great , I will have the network in a  few months so will look at it

    1Reply
  • Alan F.
    Flipper/Rehabber · CA · Member since 2023 · 1k+ posts · 1k+ votes
    2y
    Quote from @John Mason:

    @Alan

    Great , I will have the network in a  few months so will look at it

    IDK what state your in, but it may be to your advantage to see all of the requirements and law surrounding contractors and contracts. Knowing everything about your business, and subsequently managing all people involved, unfortunately, always rests on our shoulders. Best of luck John.
    1Reply
  • Peter MckernanBusiness Member
    Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
    2y
    Quote from @John Mason:

    Good morning

    If I have  250 K capital , can I make 120 K a year from flipping?

    Thanks in Advance


     It is possible.. You can use that for marketing to get deals and then partner with people with money... Or you can be the money guy and get deals from people like wholesalers etc... Or do a little of both.. The world is really what you make of it, and how you spend the 205K wisely! 

    The McKernan Group4.957 Reviews
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    0Reply
  • Evan Polaski
    Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
    2y

    @John Mason: possible? of course.  guaranteed?  By no means.

    As others noted, it depends on many factors.  Are you looking for deals that you can be in all cash, or do you plan on putting 30-40% down and financing rest?  Are you tackling multiple properties at once or one at a time?

    Are you looking at full gut remodels or lipstick level renovations?

    Do you have experience in construction and know contractors to run jobs?

    Are you GCing the deals and subbing out the work, or are you hiring someone to basically do everything?

    And most importantly, are you even able to find good deals?  

    While margins may be equal or higher on cheaper deals, you need to do more of them to yield the same cash output versus one successful larger deal.  I.e. flipping a $100k house may yield you 30%, but that is only 30k profit, versus flipping a $1mm house at 20% profit, where you make $200k.  Assuming you can find 10x $100k houses, that all yield 30%, yes, you will make more money, but you are then managing 10 rehabs versus 1.  You are also spreading out the risk by doing more.

    2Reply
  • John Mason
    OP
    Member since 2024 · 1k+ posts · 351 votes
    2y

    @Evan Polaski  Thanks for the informatiin

    I plan to do light rehabs with a known contact of mine and we split the profits.

    Only planning on smaller rehabs like maybe buy a 250 K house using HML and do light rehab

    0Reply
  • Kevin IveyPro Member
    Flipper/Rehabber · Marysville, WA · Member since 2020 · 216 posts · 126 votes
    2y

    Very possible biggest factors are can you find the deals that will be profitable (I work with auctions and that varies hugely) and how fast can you execute them and move to the next one, remember that you have time on the market and closing time once under contract (usually an extra month) before you get the capital back out.

      Then if you are only looking for cosmetic flips then you limit your targets and increase competition because every wannabe HGTV, realtor, interior designer, contractor, handyman is looking for the same easy flip.

    Its doable but lots of strategy and organization, hustle.  But the flexibility of your schedule, no boss or direct customers, and potential for a great year, and realistic expectation that you set make it all doable.   Best of luck 

    1Reply
  • Matt Devincenzo
    Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
    2y
    Quote from @John Mason:

    ...I plan to do light rehabs with a known contact of mine and we split the profits.

    Only planning on smaller rehabs like maybe buy a 250 K house using HML and do light rehab

    Recognize that everyone else want to do these too. The low risk, low capital infusion and quick exit flips will be the most competitive. So you can of course cherry pick those and stay low risk, but then you're much less likely to hit your $120K/year since you can only do as many of those deals as come up and you successfully beat the competition out on. If your objective is a given gross profit then you may be forced into doing higher risk, but less competitive and higher profit flips to achieve your goal. 

    The really profitable flippers I've known/talked to have all gotten very good at their own marketing campaigns. But they have also all gotten good at dealing with more than just the cosmetic flips. That way they can better control deal flow, and also can convert more of those leads to a profit. 
    2Reply
  • Account Closed
    Rental Property Investor · New Braunfels, TX · Member since 2022 · 408 posts · 408 votes
    2y
    Quote from @John Mason:

    @Evan Polaski  Thanks for the informatiin

    I plan to do light rehabs with a known contact of mine and we split the profits.

    Only planning on smaller rehabs like maybe buy a 250 K house using HML and do light rehab

    First thing you need to realize is that you will pay $25K in interest for the HML (at least). So you have to make a LOT of profit. Light rehabs usually don’t end up with huge profits. Best of luck. 
    1Reply
  • Ahmed Hafez
    Member since 2016 · 17 posts · 1 vote
    2y

    Hello everyone,
    I've done 3 buy and hold rental properties, and now I want to do flips, I need investors and I have some that have shown interest, in addition to speaking to private lenders that are willing to fund 70% of the LTV (based on the desired property)
    I'm seeing a lot of deals from wholesalers, but the problem is, some of them close in 2 weeks and some as long as a month, and they don't take conditional offers, and the good ones fly off the shelf really quick.
    My question is, how does someone like me close one of those deals within this short period, how do you arrange the equity and financing with little to no inspections sometimes even.
    I'd like to know how do I prepare myself to be able to close one of these good deals right away when they are offered to me and many others?

    Thank you in advance!

    0Reply
  • Luis Maza
    Member since 2024 · 8 posts · 5 votes
    2y

    Hi all, new here at the forum and thank you all for all the knowledge you guys share…its amazing.

    I am interested in this question as well as we just got back into this from like 10 years ago, few things have changed for us, and the main one is finding deals with whole sellers, sometimes the price looks good, but once we add numbers we are currently seeing that everyone else in the deal makes tons of more money than us….

    for instance, we have checked properties now, where we pay closing cost, interest on a portion of the borrowed money, commissions after selling the property, etc and we see 30-40k going out on all of this,  then we barely make a 20k profit or less on a property of 200k …many of the deal we found we barely get close to a 10-15% of the initial purchased price, which to me sounds like a lot of hassle and my wife says that i am getting old and too picky :)

    i keep saying that ideally we should shoot for 15-25% profit from the purchase price…if i get a property at 200k and the rehab is 50 and everyone else makes 30k then we should at least net out 30k as well.

    1Reply
  • Matt Devincenzo
    Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
    2y

    @Ahmed Hafez @Luis Maza welcome to the forum. It would be good to start your own topics to get better feedback since this post was started by another member with a different set of circumstances. A lot of people will probably not see these posts or respond since they're buried inside someone else's thread.

    1Reply
  • Luis Maza
    Member since 2024 · 8 posts · 5 votes
    2y

    Thanks for the heads up Matt, will do that.

    0Reply
  • Vivienne Affat
    Albuquerque, NM · Member since 2017 · 81 posts · 13 votes
    2y
    Quote from @John Mason:

    Good morning

    If I have  250 K capital , can I make 120 K a year from flipping?

    Thanks in Advance

    Flipping houses can help you earn high returns, but making $120k a year with your capital depends on: Market Conditions, Property Selection, Renovation Costs. It could be possible but consulting a real estate professional could help.
    1Reply
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