Has anyone here successfully sold a flipping business?

[James Bowers]

Hi all,

Just curious if anyone has sold a successful flipping business, and if so for what type of valuation (EBIDTA multiple)? 

[J Scott]

I've written on this a bunch in the past... It would be very difficult to sell a flipping business, for several reasons: they normally don't maintain inventory or much personal property, so there's little asset value; there's rarely any intellectual property; there's rarely any brand value; and there's not a lot of proprietary knowledge in the industry, so building a new brand from scratch has low barrier to entry.

Now, this isn't completely true. Companies like "We buy ugly houses" have been able to leverage their brand and trademarks to build value that can be franchised and sold.  But they are by far the exception, and their value is purely based on Brandon trademark, not any competitive advantage or intellectual property related to operations.

So, if you want to build a business that can eventually be franchised or sold, that's going to be the key... Building a brand that somebody's going to be willing to pay for. Not just building business.