Flipping in Edmonton

9 Replies

Hello BP Alberta, 

I am looking at a possible rehab deal in Edmonton and was wondering if I could get some feedback from you guys as to typical returns you are seeing, and maybe what your minimum return or profit limit is that you would accept to do a deal?

I am looking at houses in the $350 to $450,000 range. Is a profit of $20,000 to $30,000 a below average, average or above average return on rehab deals you guys look at for homes in this price range?

I typically invest in the US so I really don't know what kinds of returns are average for a house flip in Alberta. 

Thanks in advance.

Cal

Hi @Cal Ewing

What you have listed is around average. For 450k I would be looking closer to 40k profit though.

I can't say for Edmonton, but for Calgary starter homes (ARV = 370-400k) we look for 25k profit.

I think the profit margins should also grow a bit larger to to protect yourself as prices are coming down everyday albeit slowly in the starter home price range.  

Hi Cal,

I can't comment on Edmonton, but here in Calgary I try to focus on properties that have at least $50K potential and feel safer if my numbers show $70K plus for rehabs. My last flip I purchased for $420K, sold for $618K and made $85K when all said and done. I generally focus on properties in the $400K-$500K purchase price, with an ARV of at least $150K more than purchase price. I'm happy to discuss further with you if you would like. I can also help you find properties that meet this criteria here in Calgary if you're interested in a Calgary project instead of Edmonton.

Hi Nick,

Sales costs can include realtor fees (7% on the 1st 100k and 3% on each 100k after that - negotiable but this standard), staging costs, lawyer fees and so on. 

The big chunk is usually the realtor fees though.

@Nick

You must negotiate with a realtor in terms if selling a property.  Especially if it is a realtor you are using to buy and sell with. You can even agree on a scale l. For example first home might be 6 percent. The second would be 5 percent etc.  So there is some incentive for long term relationships on  both sides 

Originally posted by @Aidan Kutcher :

Hi Cal,

I can't comment on Edmonton, but here in Calgary I try to focus on properties that have at least $50K potential and feel safer if my numbers show $70K plus for rehabs. My last flip I purchased for $420K, sold for $618K and made $85K when all said and done. I generally focus on properties in the $400K-$500K purchase price, with an ARV of at least $150K more than purchase price. I'm happy to discuss further with you if you would like. I can also help you find properties that meet this criteria here in Calgary if you're interested in a Calgary project instead of Edmonton.

 HI, Aidan, we are investors in Calgary and we would be interested to discuss how we can do business together. We have been doing buy-n-hold in Calgary for a number of years. Also, we have been flipping. Talk to you soon
Veronica