Flipping / Rehabbing profits!

[Eli Gilbert]

All you successful Flippers and Rehabbers!

Do you have a formula for how much profit you want to aim for in your rehabbing!

Obviously the number should change depending on the size of the deal, the risk etc!

Please BP family share your wisdom!

Go!

[Will Barnard]

Originally posted by @Eli Gilbert:

@Will Barnard

Thank you!

That does help, I’ve heard and read about the 70% rule all over, but as you said each situation and each investor will have different situations/costs etc!

So what I am asking is what kind of profit would you feel comfortable walking away with after putting “x” amount of money into the deal!

As an example, I had a deal under contract where Purchase Price was $95k with $25k rehab expected and another &25k holding/ closing expenses, and an ARV of $170k!

So that fits your 70% on just rehab and purchase but closing/holding costs are large and profit potential is only $20k for putting in $145k!

What do you think about that?

So with that deal, with the assumption that $15k of that $25k holding/resale costs is holding costs that are paid out prior to closing (cash needed), then your return would be an 18.5% return ($25k profit on $135k capital investment). So depending on your hold time, that is a decent deal and I would do it (although I am not in a market where such numbers exist, $100k would only get you a deposit on a garage! Lol).

If this was done inside of 6 months, then you have an annualized return of 37% which is very good. If you can find those types of deals and preferably get in and out in 4 months and do that consistently, you have a very viable and profitable business that I would scale and nail while you can. 

And if you don’t like my baseball analogies, I can no longer help you. LOL!