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RayAmerica
@
2010 Feb 24, 12:12am
So the question I have for this board is the flipper bought at $280K and is listing at $424K, a 51% profit on his investment.
The guy has put in:
New appliances
New hardwood
New Carpet
Granite Counter tops
New Paint
I’m going to guess (PLEASE correct me) that they put $35,000 into the home to satisfy all the upgrades and work done.
Total commitment: $315K, listed at $424K, profit of 34%.
The profit an investor makes is either supported by the market or it isn't. True market value is defined by a seller able to sell and a willing and able buyer agreeing to buy. If the buyer is satisfied with the purchase price, it shouldn’t matter to anyone the amount of profit the seller makes. Keep in mind that along with the time, money invested, etc. there is a great deal of risk involved for the investor. During the renovation, these homes are vacant and are susceptible to vandalism, etc. During the investor’s ownership of the property, there are numerous economic situations that might occur that would have a direct impact on the ability to sell (terrorist attack, stock market crash, interest rate increases, etc.).
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Hi,
I'm seeing a good number of homes below $350k that are on the market that were just recently sold a month or two ago. These homes have had some basics done to them: new counter tops, carpet, yard work, coat of paint etc.
They are all asking for around $100K over what they paid for just a few weeks ago.
Every flipper is different, but is there a fairly consistant profit percentage that these guys must make at a minimum?
Without any hard evidence I feel like 15-20% profit is what these guys are aiming for at a minimum, any house flippers out there care to comment on this?
Thanks