Reasonable profits

[Dana Brown]

Relatively new to flipping/rehabing. The rule of thumb we always hear is 70% of the AVR and rehab deducted from there. In our market the median sales price is close to 300,000. I understand in a <100,000 market how that rule of thumb is super important but in our accelerating market we are not seeing people willing to walk from 90,000+ repair costs. We are also inclined to think a 30k profit is acceptable and reasonable. It seems that  an 85% ( - ) repair costs. would still amount to a successful 90-120 day flip

1) With regards to the 70% rule, does the dollar profit ever over shadow the percent rule? 

2) Does anyone have any good advice for still succeeding in an accelerating market?

[Nathan Brooks]

@Dana Brown 

The answer, for me anyway, is it depends. But really, no.  I wouldn't do it.  You have to look at each deal independently .. but at a sales price in the $300k range ... and a $30k profit margin going into it, I would NEVER ... NEVER do that.  It's just to close.  Market shift happens or all the sudden has a larger pool of homes for sale (-2-5%) ... then has longer days on market (another -2-5%) and then they nit pick you because you have been on there and they know you don't have another buyer ... and there goes $3k for closing costs or something.

It's just not worth the risk/holding/taxes/larger project=larger unknowns ...