US Home Flipping Soars Despite Profitability Plunging To 2011 Lows
- Thread starter Banjo
- Start date
Some really misleading numbers in that article.
There is no way in hell the average net profit on a flip is anywhere near 40% or 60%.
It looks like they are just subtracting the prior sale from the last sale with no consideration for repairs.
I try to be in at 75-80% of the after repair value (ARV) and then you have closing costs. My best flip was an $80,000 net on a $245,000 SP. The house cost $100,000 with about $55,000 in repairs. The rest was commish and seller paid closing costs. If you are netting 20% you are doing really well.
There is no way in hell the average net profit on a flip is anywhere near 40% or 60%.
It looks like they are just subtracting the prior sale from the last sale with no consideration for repairs.
I try to be in at 75-80% of the after repair value (ARV) and then you have closing costs. My best flip was an $80,000 net on a $245,000 SP. The house cost $100,000 with about $55,000 in repairs. The rest was commish and seller paid closing costs. If you are netting 20% you are doing really well.
Correct. The average flipper would be better off flipping burgers instead of houses.
Exactly. And it's not just flipping houses where people are getting burned nowadays. Many investors have been buying turn key rental properties in second tier cities. They either get scammed or are taking on major risks investing halfway across the country. Anytime some industry gets hot, too many people jump in, see also FBA, dropshipping etc.