Scottsdale, AZ · Member since 2016 · 64 posts · 25 votes
Hey BP! I live in Phoenix, Arizona am about to start my flipping business in a few months. I'll have $300,000 to work with and was planning on doing my flips here in Phoenix but was wondering if anyone would recommend flipping in cities in other states that would potentially offer a higher return. Just interested in your thoughts, thank you!
Specialist · Indianapolis, IN · Member since 2016 · 841 posts · 480 votes
9y
Start close to home - if you're in Phoenix, there is no reason not to do at least 2 or 3 where you can keep an eye on them and really get into the nuances of the process.
Real Estate Agent · Indialantic, FL · Member since 2014 · 182 posts · 80 votes
9y
Hi Hannah. Congratulations on your new adventure! I am wondering, what returns are you expecting to get in Pheonix? Knowing that may help others direct you to areas that might have better returns. Good luck to you!
Scottsdale, AZ · Member since 2016 · 64 posts · 25 votes
9y
Hi Wendy, Thank you! My business plan requires a minimum of 20% profit on any flip. I am a licensed Realtor in Arizona so that will save me an extra 3% on the sale side which is an extra benefit, but I am also considering moving to a different state and I'm curious if others are averaging larger returns elsewhere.
Specialist · Indianapolis, IN · Member since 2016 · 841 posts · 480 votes
9y
Start close to home - if you're in Phoenix, there is no reason not to do at least 2 or 3 where you can keep an eye on them and really get into the nuances of the process.
Investor · Tampa, FL · Member since 2016 · 334 posts · 215 votes
9y
Any city with double digit growth in the past 5 years will do well
San Fran
San Diego
Vegas
Denver
Dallas
Austin
Minneapolis
Nashville
Atlanta
Tampa
Jacksonville
Charlotte
Orlando
Miami
Charleston
DC
And - your home town Phoenix.
You're in a great market for flips.
Investor · Champaign-Urbana, IL · Member since 2014 · 84 posts · 49 votes
9y
@Hannah Hammond Personally I suggest you stay close to home and flip a few properties in a city you're already established and a licensed realtor. Once you've done that and feel comfortable with the process you can move to another city that will give you greater COC returns. I'm biased because I live in San Diego, but I'd suggest you move to San Diego once you're ready to flip properties elsewhere. The profits for flippers are good and it's hard to beat living in San Diego.
Specialist · Indianapolis, IN · Member since 2016 · 841 posts · 480 votes
9y
You're in a good market - do a few and get your feet wet. Remember to make a plan - a plan for 3 or 4 flips. Stick to that plan, then evaluate when you are finished.
When you do your rehabs, do it the same way. Get all costs associated with your property and project, get a detailed plan on your flip - then don't deviate from it. Swith & change = sinking ROI. Don't forget that you buy a good deal, you can'g make a good deal happen during rehab - have to find & buy it up front.
Scottsdale, AZ · Member since 2016 · 64 posts · 25 votes
9y
Thank you so much everyone for your great input, it is very much appreciated! Looks like I'll be sticking to my business plan and staying in Phoenix for now =)
As to your question about if anyone is doing better than 20% ..Well ..the golden rule is 70% puchase price after rehab and fees . so if you have a property thats worth $150k arv but the rehab and fees is $50k then you need to purchase it for a maximum of $70k which will net you 30% .. I will not even consider anything under this figure .. maybe I have to many to choose from but my flip in am doing now has a projected profit of 65% roi .. and i am putting in a offer, hopefully by tomorrow for another one that has around 50% roi ..
The only way i would consider anything less is if it was a turn key quick flip ..
hope this helps .. i wish you all the very best luck ..
Scottsdale, AZ · Member since 2016 · 64 posts · 25 votes
9y
@Account Closed
Hi Michael!
Yes I am aware of the golden rule, I was just saying my business plan requires a minimum of 20% return per flip, but I will be aiming for a minimum of 30% return. All depends on how much rehab it needs and how quickly I will be able to turn the property over.
Those returns are very impressive, congratulations! How are you finding most of your deals?
Investor · Bushnell, FL · Member since 2016 · 456 posts · 224 votes
9y
@Hannah Hammond I look everyday .. and sometimes i get lucky .. just the same thing you hear from everyone .. network , look, be aware of your market ..that way you can recognize a deal when you come across one .. For example .. I have had my eye on a property for a few months .. noticed it was all over grown and not being lived in .. so as I was sending letters to the owner hoping to get their attention , i just looked at it everytime i drove by .. one day not to long ago .. bam .. i saw a van parked there and someone was mowing the lawn and the trees were cut and being cleaned up .. I figured thats why i never heard back .. someone already bought it .. so .. i kept driving .. then i thought .. what the heck , and i turned around . Come to find out the address the letters were going to was the owners northern property and he was down here in Fl for the winter .. when i asked him if he wanted to sell , he said .. i might but I'll need top dollar for it .. I asked .. what do you think that is ? .. he replied , oh..$35k .. my eyeballs almost popped out but, I kept my cool and said .. can I look at it ? .. long story short ..I looked at it ran home and printed a contract , took it to him and he told me his wife refussed to sell. I sent the contract home with him .. hoping he could talk his wife into selling .. Im still waiting and asked him if his wife was looking for more money ..which he replied yes , so.. I told him to give me a number and maybe I can work with it .. he has not yet .. I know this is a example of one i have not put under contract yet but it still is how I find properties sometimes .. I just hussle the best I can .. by the way, that house was a 4/2/2 2600sqft on a 1.3 acre lot that needed about $50k worth of rehab .. the Arv was around $200-220k .. would be nice if i heard back from him .. I was willing to go much higher .. might still make another offer .. just giving him time ..
Investor · Tampa, FL · Member since 2016 · 334 posts · 215 votes
9y
Evan Greenfield
We focus on SFHs in the 2nd best school districts using the BRRRH strategy. (The "H" is for "Hold")
Folks who live in the best district are most likely not renters and the 2nd best districts have a higher likelihood of positive cashflow and see similar appreciation levels of the best districts.
I know a lot of BPers make good cashflow in places like Ohio but I doubt their appreciation figures crack double digits after 5 years.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
9y
This question is always going to bring the same answers, and each answer will be coincidentally the area in which the responder is flipping. In other words, certain bias will be present. I could tell you the Los Angeles area is the best place to flip but that would not be a fact as I have not flipped in every other area to know the precise difference.
Best advice, start in your backyard for flips and see how it goes. You have much more control close by. That said, your particular market happens to be a strong market for flippers so don't bother starting anywhere else.
can you or someone in here explain to me how you get to the 20% minimum on all flips per your business plan? Is it a return of 20% of the total money you put in? 20% of the ARV? Sorry, I know it's probably sounds like a stupid question and very elementary but I'm kind of elementary right now. Thanks in advance!
For this example, a 20% return would be if I invested a total of $100,000 in a property and sold it for $120,000 (Net). That would be a profit of $20,000 or 20%. Hope that helps!
Investor · Miami, FL · Member since 2017 · 5 posts · 1 vote
9y
Hi all! I have a question for Eric Delcol. He advised Hannah to invest in areas where there is double digit growth. What criteria do you look at to determine the growth rate? Is there a resource that will give you the growth rate? Thanks!
Real Estate Entrepreneur / Investor · Chicago, IL · Member since 2016 · 688 posts · 367 votes
9y
@Hannah Hammond hey. I know Illinois and Indiana doesn't have as many good flips as some other cities but there are some subcities within each state that have over 20% ROI for flips. If you want me to explain a little further PM me.
Flipper/Rehabber · Crown Point, IN · Member since 2009 · 482 posts · 216 votes
9y
Anthony,
I'm seeing some examples that aren't making sense to me. When you're calculating your ROI (return on investment), it's very important that you add in the closing cost and holding costs, or else you'll get burned and not make your ROI%. You should add in the following before calculating your ROI%: 1. Closing costs. Even if your buyer is paying the closing costs when you flip it, you'll have to pay the realtor fees. That can be as high as 6% of the selling price. 2. Holding costs. You have insurance on the property, taxes, utility bills etc. These all need to be factored in. Some people also factor in the closing costs they paid to purchase the property, because after all, it was a cost you incurred. I made an excel spreadsheet with a couple of simple formulas that calculate the ROI for me. PM me for more information.
Shiloh, not yet, I am still building my network. My business partner comes back in 3 weeks so I have that time to continue building relationships before we hit the ground running.