I’ve never flipped a realtor-listed property, however I would have to say that it would have to be an extremely incredible deal. The home would have to be way underpriced. I know it’s not a preferred method of acquiring property to flip as it is usually no room for the end investor to profit.
Example: SFR listed for 65,000
Market Value after repairs completed: 120,000
Repair costs: 15,000
Now, you purchase for 65,000 and keep in mind the repair costs after acquisition - 15,000; consider agent’s fees and closing costs too
Total expense for you: You’re really investing at least 80,000 into the property, not to mention whatever fees are payed during closing and to the agent
So, 120,000 - 80,000 leaves 40,000 potential profit without an agent; yet, just assume the agent gets a measly 2% - that equals 13,000 for this agent (2% multiplied by the contract price - 65,000
Now add that 13,000 to the 80,000 you’ve invested in the property - 93,000 plus any closing costs
Say, you’ve spent roughly 95,000 total
120,000 - 95,000 = 25,000 profit
Maybe you could give it to another investor, charging him maybe 2,000 to 3,000 - that’s it - so he or she can get at least 22,000 or 23,000. However, all you’ve invested - is this even worth it? The wise thing I would believe to do is to keep this property yourself and sell at retail. Just my perception of the entire transaction from start to finish; let it be known that I am a newbie. Hope this information helps.
Have a blessed evening.