What are your criteria for your flips?

4 Replies

What area are you investing in?

Do you look for a certain percent return or a flat amount?

What is your main source of leads?

How much do usually budget to spend for rehab?

What type of houses/buildings are you focusing on?

And as the title says, what are your criteria?

Sorry for all the questions!

@Lukas Getter

What area are you investing in?

I invest in my backyard, which is Tarrant County (Fort Worth).

Do you look for a certain percent return or a flat amount?

I look for 12% of ARV (most flippers do not take this approach) and I have a floor of $20k that I won't go below. Too many variables can go wrong and I have found using these numbers helps ensure a good and successful flip even if something big and unexpected comes up, which almost always does.

What is your main source of leads?

I send about 250 direct mail letters/postcards to pre-foreclosures every week. I tend to get on to two decent leads a week.

How much do usually budget to spend for rehab?

It will all depend on the home and condition. A rule of thumb I use for the Texas market is $14/sq ft to get it rent ready or low end flip, $18 for a medium flip, and $23 for a higher end flip. This does not include HVAC, roof, plumbing, foundation, and electrical.

What type of houses/buildings are you focusing on?

I only flip SFR right now.

And as the title says, what are your criteria?

I typically look for 3 bed/2 bath - 5 bed/3 bath. I will also entertain a 2/2 with at least 1,300 sq ft because it should be easy to add in a third bedroom.

Big takeaway and questions you should answer to continue your journey:

Why do you want to flip? It is a very active job that takes a decent amount of work and time.

What areas are you able to afford (for flipping you really should be working in or around the city you live in to start out)? What areas are selling well? Where is the "path of progress" or where is money being spent and neighborhoods being changed?

Once you figure those two things out you can start looking for deals. It is okay to get started without knowing the entire process. If you have a good deal, you will be able to get the info you need as you continue to progress in the process.

What area are you investing in?

Sacramento County, since I live here and know the area well. 

Do you look for a certain percent return or a flat amount?

No exact percent, just depends on cash requirement and scope of work. If it's a huge project, I'll need to make say at least 50k? If it's small (paint/carpet/counters), 20ish could be okay. 

What is your main source of leads?

I wholesale too so my own marketing is the source. DM and Cold calls

How much do usually budget to spend for rehab?

Depends on the deal. Usually 30-40k for your average 3/2 SFR.

What type of houses/buildings are you focusing on?

SFR

And as the title says, what are your criteria?

No ghettos, no luxury, no structural issues

Originally posted by @Lukas Getter :

What area are you investing in?

Do you look for a certain percent return or a flat amount?

What is your main source of leads?

How much do usually budget to spend for rehab?

What type of houses/buildings are you focusing on?

And as the title says, what are your criteria?

Sorry for all the questions!

DFW, mostly Dallas.

When I run our numbers, I usually look for an 8-10% return with some form of "kicker".  Ie can we eventually build on the lot, or can we do a rehab, or is the property in an up and coming neighborhood.  We really focus on properties that "break even" if we do nothing, but that have a lot of upside if we unlock hidden value.

Main source of leads is more or less anything. Zillow honestly works well, but we have gotten FSBO, and pocket listings.

We budget for rehab whatever we think should be done. 

We mostly have invested in SFH's. But increasingly are interested in small multi family or commercial properties were we can bring a value add component to the table.

Our biggest criteria is does the property break even or have a decent return if we do nothing, and then are there other exists?  Ie can we rehab it, fix and flip, live in it as a house have, reconfigure the layout, does the property sit in the path of progress?  is the neighborhood on the way up.

Primarily Oklahoma, but have purchased a few in bordering states. I never ever pay above 65% ARV minus repairs. 80% of my leads are free from SEO, and the other 20% comes from referrals, Bank REO's, or Auctions. I estimate the repairs on my own or based on my acquisitions manager's estimate, but after contracting have GC bid every property prior to close just to make sure we didn't overlook anything. Been mainly buying SFRs, but starting to expand into multis and commercial now. I hold most of my properties now though, or at least the ones with the best numbers between 2-3% or better rental to price ratios.

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