Flipper/Rehabber · Kansas City, MO · Member since 2010 · 758 posts · 780 votes
What is your business plan? Do you hit consistent singles or do go for the home run every time? What do you compare your business plan to a Derek Jeter (consistent $10-20k rehabs) or are you more of a Prince Fielder hitter that swings for the fences ($30-40k+ rehabs)?
The reason I ask is that I have had trouble finding and closing on properties that have more than $15,000-20,000 profit in the house. Do you pass on the singles and only swing for the fence?
I'm sure it depends on the market, business goals, etc, but any input is appreciated.
I tend to be very conservative and shoot for a minimum of $15K or 15% of resale price (whichever is greater) in profit on each rehab. Over my past 25 retail sales, I've averaged nearly $25K in profit, so being conservative is working.
I've hit $40K+ profit on two projects ($145K and $165K resales), I've hit $30-40K profit on 6 projects (resales from $95-175K), and have only come in less than $15K on two projects (my very first flip was one of them).
So, I really like the methodology of shooting for "singles" but being conservative enough that they often turn into doubles and triples (and maybe an occasional home-run, depending on how you define it).
I tend to be very conservative and shoot for a minimum of $15K or 15% of resale price (whichever is greater) in profit on each rehab. Over my past 25 retail sales, I've averaged nearly $25K in profit, so being conservative is working.
I've hit $40K+ profit on two projects ($145K and $165K resales), I've hit $30-40K profit on 6 projects (resales from $95-175K), and have only come in less than $15K on two projects (my very first flip was one of them).
So, I really like the methodology of shooting for "singles" but being conservative enough that they often turn into doubles and triples (and maybe an occasional home-run, depending on how you define it).
I am not actively looking for a flip right now. But, once i resume, I plan to offer about 5% more on purchase and will settle for a target of $15k rather than $20k in the resale range of $100 to $130k. I think in order to compete with OO's and people that just plain ole don't know, I will have to settle for a little less than I have been aiming for. I am going for the volume route rather than the "grand slam".
Don
The last 4 projects I've done averaged a 16% ROI with average profit of $34,000. Resale price ranging from $190k-$265k.
While I shoot for the home runs I will settle for a base hit....in most cases only if the property is just right. Quick rehab, active MLS area, and a resale price that I know will sell quickly for the neighborhood.
This is market dependent I believe. Up her in Seattle area we shoot for 30k plus. But, just getting going on our first couple projects in the Dallas area. Down there we are shooting for 20-30k.
I usually aim for $10,000 to $15,000 in profit but my purchase price is low at between $25,000 to $60,000. In addition to the low price range I also try to do as little work as possible to have it ready for sale. It's see it as a mix between wholesaling and flipping because I do take title to them and do a little work but I do mean a little. I also usually sell for cash to other investors, generally landlords.
