How often do you actually LOSE money on a flip?

[Andrew Taylor]

Doing a little soul searching on a long road trip this weekend, and it occurs to me that I'm afraid of failing at flipping houses. My question is, should I be afraid of actually losing money? Or should I be afraid of not making as much money as I expected to? It's a subtle difference, but a meaningful one. I've got lots of background in the industry, and completing the projects doesn't worry me - but accurately predicting ARV's and therefore expected profit concerns me quite a bit. Just wondering what everybody else's experience has been. Thanks in advance for your input.

[Eric M.]

Be very careful with a question like this. You are going to get very skewed responses because the audience is self selected. The people who are going to answer are the ones who are generally current investors. They are current investors because they have generally had success.  The people who lost money are no longer current investors and are no longer here to answer. 

Also most of the people here have only flipped in a bull market. (post 2010)

The majority lose on their first flip and never do it again. I lost 70K on my first one and didn't flip again for 3 years. Most people would not have done it again. I haven't lost on one since, but it is very common to lose money on flips. Lots of people turn their failed flip into a long term buy and hold rental and eventually come out ahead. In reality those were losing flips.

I don't know what your odds would be. Your profile says you are a contractor. I would think a contractor with some common sense would be able to make profits. And sometimes, you just consider your first loss to be your tuition.