What’s the Minimum Profit You’ll Accept on a Flip?

Question

When running numbers, do you have a fixed percentage or dollar amount you require before moving forward on a flip? Curious where different investors draw the line.

Cheryl Schuck · Answer

I think the dollar amount would depend on how much time it would take to complete the work. Time is money, so that's always the place to start.

Peter Mckernan · Answer

Sometimes it is a percentage for us and sometimes it is a dollar amount. If we are $500,000-$750,000 we are needing about a $40-$50K on the deal, and of course the higher the deal gets the bigger the profit.

Scott Chilton · Answer

Most investors I know use a simple rule of thumb. They want enough profit to cover all costs, pay themselves for the risk, and still have a cushion if the market shifts. For many that means aiming for at least twenty percent of the after repair value.

Evan Polaski · Answer

$50k or 20%, whichever is larger.

While my average flip is $400k or more, I would not even take on a $100k flip if it meant I might make $30k.  That can too quickly be eaten up by unforeseen items.

What’s the Minimum Profit You’ll Accept on a Flip?

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