How many house flip can be completed in one year?

Question

I was wondering what is a reasonable amount of house flips that can be completed in one year? And what is the average or an estimated profit for each flip?

Alan Brown · Answer

Wow TRUE DAT, ALL Y'ALL

@Joshua D. most excellent sage advice as always!

@Bob Okenwa, fantastic mentoring.

@Jonathan Olivares, go for it man!!  There are old farts like me that will come out of the woodwork to help a young guy out;  Josh is right, go to every REI you can find.  And both these guys not kidding about BP being a PhD in Real Estate investing.  I wish like hell I had all that available to me when I started... you've got a gold mine of information free, thanks to Josh Dorkin.

Good to have goals and take MASSIVE ACTION, but don't get too hung up on a number to reach to start investing.  Here's what I think you should do, I would do if I were your age:  Go for the flips for sure if you like the idea... but start out by also house hacking a multi!!  have someone cosign with you if you need it, to get an FHA 3.5% down loan to owner occupy something (I think a 4plex would be best);  Eventually your return on investment (ROI) will be almost infinite with so little cash invested.  Also, you probably will have free rent from the cash flow from the other units, so what you would be paying in rent money can go into your flips.  HOUSE HACK AS MANY TIMES IN A ROW as long as you can stand living in multis, then house hack a house with a roommate:  Someday you'll have a spouse and they won't let you get away with it for long.  DO IT WHILE YOUR YOUNG!!

Then, as you get good at flipping, cull the deals you find that make great rental sense, for yourself... I have a friend in Kansas City who does about 60 flips a year, and I think he grabs a couple a month for his own portfolio.  Do the BRRRRRRR!  IF YOU do it right, you don't need to put in long term cash.  You find a flip, have your crew rehab it, decide to rent it, and as soon as your lender will let you refinance it, do it!! (this is tricky but find the right lender).  Then you have pulled ALL your capital out (hopefully), and maybe even a little more, and your returns will literally be INFINITE, because you have NONE of your own money in it.  "Velocity of money"

Also, if you're frozen, find a contractor you trust, go to REI's, find people you trust.  Vet them as best you can, then bring them a deal and split it with them:  Have them work the deal with you and teach you everything.  Wash their car if you need to.  Once you have done one, you will feel much more confident.  Keep going, growing, making mistakes.  Hell, in 2-5 years you might have all the income you want, and didn't have to wait to stash away $400k!

ps take a road trip across country and listen to 80 of the BP Podcasts.  Then do another one and somewhere along the way you can listen to all 225 of them.  It's all in there.

Bob Okenwa · Answer

@Jonathan Olivares

The amount of flips will be dependent on the amount of money you have whether it be your own, hard money, or private money. From there it depends on how good a crew you have. Time is money so you'd need individuals who can turn around properties in a decent amount of time. There is no "average return on each flip" due to the variables that will be present on your deal that will or will not be present in the deals of others. @Joshua D. is in Montana and that market is probably significantly different than FL. Your property may have been built in 1910 and may need a complete rewire and replumb vs a house in AZ that was built in 1973 that may not need either. All in all, the best answer you're going to get is "it all depends".

Jonathan Olivares · Answer

@Alan Brown wow. Thanks for the advice and valuable information. Im studying and working on establishing the business. I'm reading effective marketing books to create and gain traction on my lead gen (which is the holy grail of flipping, and wholesaling homes). Now my initial challenge is getting out of that education phase and start taking action. I feel like I get stuck, or can't get started, because I have that feeling of doubt that I need to know LITERALLY everything before I start or it will cost me big time.     But other than that I'm reading on BP every day. I have a job, so with my paycheck's I'm buying every real estate book. I'm trying to soak up as much knowledge as possible.

Jonathan Olivares · Answer

@Joshua D. well I'm really considering multifamily because it's a great way to create wealth. It's a very lucrative business. I've been really studying the multifamily game for a while now. But like anything to get started I need a chunk of cash. So that why I'm looking into flipping houses to get that chunk of cash I need to get started.

Joshua D. · Answer

@Jonathan Olivares

Yes it is possible. most of the players in our market that are doing this stuff started at least 7 years ago and now do 20 flips a year.

I almost guarantee that you will not have this success overnight. takes massive amount of work and the exact right personality to have that kind of success.  Because I am a do-it-yourself-er I prolly wont ever get to that level of business.  Course I have no desire to.  I want $6000 a month in cash flow, I don't want no flipping biz to manage. sounds terrible to me. I want 10 paid for SFR's to keep my headache factor to a minimum.

What are your goals? Why multifamily?

Jonathan Olivares · Answer

From what I've heard I see flippers profiting nearly 400k a year on all their flips executed during that year. (Assuming these are really advanced people)

Jonathan Olivares · Answer

@Bob Okenwa yeah you're right. My mission right now is as you said learn as much as possible, and find an individual who is are already in the game and pick their brains.

@Joshua D. wow. Your a huge confidence booster! I'm trying to take this as a full blown business approach. And I'm trying to stash almost all profits away, in order to get to the amount I'm seeking to get into multifamily investing. With  a good effective business model, generating good lead gen, do you think it's possible to stash away 300-400k in 2-3 years by saving all profits?

Joshua D. · Answer

@Jonathan Olivares

40k profit. that's what we take home before taxes.  some have been 85k, some have been 27k (our lowest)

Do yourself a favor and do NOT sign up for a course... People who are committed to a goal will have success.  you need education? Bigger Pockets is at your fingertips.  Listen to 65 of the podcast In the month of May.  That will give you more solid info than a paid course right there.  If you are serious about this then you will be able to find a way.

Confidence is huge.  I wish i would have known this earlier in life. Never give up. Learn all you can, go to every REI you can find in your area. Take to lunch every active investor in your area and see if you can help them out. learn from them.

Take massive action, you got this!

Bob Okenwa · Answer

@Jonathan Olivares

People will take you seriously if you present yourself in a serious manner regardless of age. If you know what you're talking about beforehand and don't need a ton of hand holding, it's less likely someone will take advantage of you. I've heard some of the programs go for more than 20k so you'd be better off doing a deal for that amount of money because if you spend that on a "mentor", then you're still going to need cash after that to get a deal going. That 20k may give you peace of mind, but it ultimately won't put you in a house.

The way I approach it is I look at it as a full-fledged business and not simply "flipping houses". Taxes,  strategies, design, people management, accounting, legal issues, etc. Make sure to take that all in account then decide if that is really what you want to do and deal with.

If you can find an investor-friendly realtor that also has experience with investing, then they should be able to give you tips and advice along the way. My realtor has such experience so I'm able to bounce any ideas off her before I make a move should I need such insight.

Jonathan Olivares · Answer

@Bob Okenwa great. I just get frozen. Because I've heard of the dangers of flipping houses. And I feel like sellers, lenders, agents etc won't take me serious, because I'm only 18 years old. So through the program what I was really seeking for was a mentor. But most programs are REALLY expensive. So I was going to save money to afford the program, but I don't want to spend my hard earned money on a program or mentorship that's not worth the amount their asking.

How many house flip can be completed in one year?

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