What's a good return for a flip??

Bird Dogs, Wholesaling
1

Say you had 100,000 to invest in a flip. The 100,000 would include all costs -rehab, holding, selling. Say the flip took 3 months. What minimum selling price would you expect to get for it to be worth your efforts?

Or maybe I am asking wrong. What calculations do you use to determine if a flip is worth doing?

Either way, any help is appreciated.

Thanks
Jeff

2

Well that is probably too broad of a question for the number crunchers to even respond to but those of us that love the sake of argument or speculitive conversation this is right up our alley ;)I personally am feverishly trying to find a way to quit my day job .I have lots of experience in remodeling so I would think for me If I could turn a property to average out to = more income than my current day job and all additional expenses covered (health ins. car payment,utilities etc…) which I figure would be about $4000/month .So for me If I can turn 3 properties at $20,000 profit each that would be roughly $5000 per month .I could live off that how about you?Just imagine if we could do 4 a year.HMMMM 1 every three months.I think that can be done easily.What do you think?

3

OK, I’ll bite… That sounds great, and I could easily live off that, but I’m in the midwest. The skeptic in me thinks that banking on 20K per deal seems quite speculative. Maybe this is possible where the appreciation is still out of sight (and not artificially inflated) - like Florida. I’m keeping my day job indefinitely. Unless you had a huge cash cushion, if a deal went sour you could be sunk. Then you would be strapped for cash to live until your next deals (hopefully those are successful) pay up the difference. I am just starting out and my goal this year is 2 rehabs. When I have 10 deals completed, if I made 20K per deal and did 3 to 4 a year - my day job would be BYE BYE too. It looks good on paper, but until I have real world numbers, I’m stuck in the grind.

Jeff

4

Ok you wouldn’t do a flip that offers 10k profit if the price of the house was 400k, right?

So what is the threshhold?

Does anyone use a calculation based on $$ at risk vs return?

5

It all depend on how…

  • much of your time you spent on the project
  • much of money you spent on the project
  • much of risk you took on the project

I generally go with rating on above questions on

Very Small, small, midium, high and very high

based on that you can decide what’s good profit margin.

6

This whole REI business is based on speculation.every cotton picken way of doing it.No matter if you’re flipping ,rehabbing,assigning,it doesnt matter .There is no way for anyone to say Im going to do this deal and Im going to make $20,000 no ifs,ands or buts about it.straightup…appreciation has VERY little to do with flipping if you are working on a 2-3 month speculation,YOU MAKE YOUR MONEY WHEN YOU BUY THE PROPERTY.If you arent buying cheap enough to survive the worst case scenerio your mentors can imagine ,your not buying low enough.Even at that there is no guarentee of profit.the key to success but not the guarentee is KNOWLEDGE STUDY STUDY STUDY and then walk away and turn around and RESTUDY RESTUDY RESTUDY to see if what you were studying has proven to be true,KNOWLEDGE IS POWER ;D