House Flipping - Profit vs Volume?

Question

Hello community. My name is AJ and I’m a new house flipper. So I’m very very early in my career, I’m now gona start to look into purchasing my first flip. I’m not trying to get ahead of myself but I have a questioned for my season flippers or anyone with some good advice. And honestly this may seem like a simple question but after I get rolling Flipping homes, I do plan on scaling my business to Flipping 3-5 homes simultaneously and just for clarification, from the research I have gotten on how flippers grew their business. When they wanted to flip 2, 3, 5, homes did you guys focuse on volume rather than profit you would have made on each individual property? It kinda makes sense just like you don’t want to do your own rehab work as a flipper. The idea is to purchase the home at a great price under way under market value get it rehabbed to me as soon as possible with quality and ethical work and get it back on the market. I’m guessing that’s the idea of your approach when scaling your business as well? Just try and flip more homes over a period of time rather than just sitting on each individual one? Volume over profit? If that makes sense?

Derek Carroll · Answer

@Alton Bell

I just focus on buying as many properties at a time as I can that fit my metric. I’m currently doing 12 flips. I need to make a minimum $25k per flip to make it worth by while and feel like there is enough margin to cover unknowns. While I’d love to make $100k on a flip that rarely happens. Just keep buying deals that fit your criteria and soon the business will scale and eventually you’ll also get the home run deal.

Barb Asay · Answer

@Alton Bell

I have rentals and also flip.

Last year we flipped 3 and netted $200k (pre-tax)  We didnt overlap projects too much but a little.  We didnt go into it intending to work on one at a time but thats how the deals worked.

Our strategy for flips is profit over volume.  Whats the difference if I flip 5 at once and make $10k each or do 1 and make $50k?  Its less stressful, less room for error, and if shit hits the fan I have one bum deal that I can always stick a renter in instead of 5-10 empty homes with holding costs.

Now, keep in mind that this works for us because 1) we are in a smaller market and volume isnt really feasible 2) we are doing most our own rehab work because we are capable and we enjoy it

I have people tell me its stupid to do my own work but I disagree.   I am self employed, make my own schedule, make great money and am proud of my work.  Who cares about volume if you dont make any money?

Liz Garcia · Answer

@Alton Bell

For sure I would saw to get a handful under your belt before trying to scale. Flipping can seriously make your head spin. I can’t imagine overlapping them. I would think some profit would be lost in just not being able to keep up with all the moving parts. I flip one at a time and have profited $50-$85k each time. I think focusing on getting it done fast is most important but that’s because I decided I want 10k per month out of a deal and want enough downtime in between so I don’t get burnt out.

Sean H. · Answer

I flip 1-3 a year, average 50-150k profit/a house. I do a lot of the labor, and take home an additional 25-50/house with that. No stress, no deadlines, and i get to keep my control. I don't plan to increase my volume.

Alton Bell · Answer

Ok that’s exactly what I was trying to figure out. That’s some great insight. Thanks a lot.

Carlin Randolph · Answer

@Alton Bell I would say that flipping a home, whether you are doing it with your money or worst, with someone else's money is a very serious job with very serious consequences. There are a lot of moving parts and management of the process from start to finish. Perhaps the best option would be to scale up in your ability to find and/or create really good deals. Investors skip this step of the "career" aspect but it is thee one step that can make you a lot of money. Once you find your first  great deal, focus on that one and learn everything about your role and every role that is a part of the process...where it goes wrong (and there will be some wrongs) and where it went right. I would propose that scaling a business is mostly about getting systems in place that work more efficiently at an increasingly faster pace. They eventually become so efficient that when it is time to do more than one flip at a time, the smoothness of your processes will tell you and you won't even have to ask. Good luck!

Alton Bell · Answer

Ok ty

House Flipping - Profit vs Volume?

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