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Author Topic: Question for flippers  (Read 2012 times)

Offline NCInvestor

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Question for flippers
« on: October 11, 2005, 11:38:55 am »

Hi,

Do you have a minimum profit you are looking to get for houses in certain price ranges?

For example, in the 50K to 75K range, are you looking to make at least 10k? 15k?

Thanks

Offline PilotBill

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Re:Question for flippers
« Reply #1 on: October 11, 2005, 06:15:46 pm »
If you  are quite sure you can make a profit that is worth your time and effort, then it is a good deal for you.  It doesn't matter whether it is a good profit to someone else.  

When I first started out in business and the phone rang with an opportunity to make $100.00, the day before the rent was due.  I would walk across town in the rain, in the middle of the night to  meet a customer to earn that money .     Now I own quite a few properties, do renovations, do some financing for other investors, etc, etc.  I don't want to even be bothered with a phone call for something that I can't make $10,000. on   I'd rather take my daughter to the pool.      

Offline aflexaholic

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Re:Question for flippers
« Reply #2 on: October 11, 2005, 07:18:04 pm »
Well said....

Offline JaredfromIndiana

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Re:Question for flippers
« Reply #3 on: October 11, 2005, 07:19:45 pm »
Good points Bill...

I won't touch a deal unless I can make $20,000 from it.  Not worth the risk for 10-15.  

Jared

Offline aflexaholic

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Re:Question for flippers
« Reply #4 on: October 11, 2005, 07:20:57 pm »
ok then send me the ones where you make 10-15K :)

Offline PilotBill

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Re:Question for flippers
« Reply #5 on: October 11, 2005, 07:36:16 pm »
Thank-you Bluestart,  I like validation.

One point I did forget, that I thought of later.  I have found that many investors get busy doing small deals that they don't have time to find the really good ones.    If you get busy doing even a light, paint and carpet rehab to make a measly $10,000.00 you might not have the time to check out the one that gets away where you could have made $50,000. in about the same amount of time.  I guess that could be added to the " be worth your time and effort" part  


Offline niravmd

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Re:Question for flippers
« Reply #6 on: October 12, 2005, 12:39:07 am »
my friend asked me the same question last week. [this was on a preconstruction flipper]
i told him unless there was a potential to make 50k, it wasn't worth the risk.

if you're doing rehabs, you should be making 20k/deal if not more. below that and you're asking
for trouble. something will go wrong and you'll end up making nothing.
Make your investments work hard so you don't have to!
http://snipurl.com/topbooks

Offline masoning

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Re:Question for flippers
« Reply #7 on: October 12, 2005, 03:32:30 pm »
Niravmd,

I agree that you should make at least 20,000 per rehab.  I hear many rehabbers say that they work on a 20%, not $20,000, profit per rehab.

I would never ever work on a project that had a 20% profit margin built in.  If you have done more than one rehab you know what can and most likely will go wrong.  Any screwup in your numbers on the rehab or a theft, etc can run up your costs.

When I do my rehabs I look for a 100% or more profit.  If I buy a building for $20,000 and put $10,000 into it, I expect to sell for $68,000 or more.  This way I cover my 10% selling costs (realtor and settlement fees).

Offline Baloo

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Re:Question for flippers
« Reply #8 on: October 12, 2005, 05:32:14 pm »
I think acceptable profit potential increases with experience.  Going into my first deal (just closed yesterday) I am estimating 12-15k low end, possibly up to 30k depending on how this crazy market in MI is in 2 months.  Being my first deal if I walk away with 10K and an education (or the start there of) then I consider myself blessed.

And like it was said, it is relative to your situation.  If your working the grind just to make 20-30k a year, getting a 10k return on a couple months of hard work is golden.  After you have done a few and have lessened your need and increased your efficiency, 10k is a pass.

Just my humble thoughts

Offline auggflo

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Re:Question for flippers
« Reply #9 on: October 12, 2005, 06:57:52 pm »
I'm thinking like Baloo. I'm looking to do 3-4 rehabbs in my 1st year while I work the 9-5. What I would like to get is a the education and 4 rehabb deals at 10k profit put me just over 100k a year. From reading some of these post I'm starting to feel like it's a waste of time.

Masoning, have you made 100% from when you 1st started.

Thanks
auggflo  

Offline masoning

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Re:Question for flippers
« Reply #10 on: October 12, 2005, 09:09:25 pm »

(Masoning, have you made 100% from when you 1st started.)

I am not sure if you meant to ask if I made 100% on my first deals.  If that is your question, my response is that in the beginning I was perfecting my skills.  I made almost zero my first year while I waited for my first two rehabs to finish.  However, once they finished, I paid off ll my debt and yes I did make about an 80% profit on each rehab.

I had a 5 year plan and income was not part of my strategy for the first year.  I knew that REI was what I wanted to do and I needed to learn what parts of it I wanted to do (rentals, rehabs).


 




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