Preferred size during home flips

[Daniel D.]

I'm curious to get your thoughts on the size of a home that you prefer to do flips on. I've seen on here that many people like a 3/1 or 3/2 1400-2000 square foot homes. I'm interested to know the reasoning of that. Is it because it's a smaller home, the rehab etc can be done much quicker and the turnaround is fast when selling? As opposed to a 3,000- 4,000 sq ft 5 bedroom/ 4 bath home where the return could be much higher, but risking longer turnaround times.  Is there headaches involved with doing bigger homes? Is it the financing that turns people away from doing them? Curious to hear. Thanks.

[Scott E.]

In my market where I do most of my flips, I start by thinking about what the end buyer is going to be looking for. Most "end user" buyers around here are looking for a 3 bedroom, 2 bathroom, with ~1,800 square feet of living space, so I try to look for deals that already have 3 bedrooms, 2 bathrooms, and about 1,800 square feet of living space.

To me I don't care if the house is 1,000 square feet or 6,000 square feet. Also don't care if it has 3 bedrooms or 6 bedrooms. My process is almost identical regardless. Just need to make sure I'm offering a sellable product in the end.

With that being said, I'm currently doing a couple of luxury deals because the process and effort is about the same as the smaller deals, but the profit is much larger.