How much are y’all trying to make on your flips? $250k ARV homes

[Steven Barr]

I know it's easy to get hung up on the 70% ARV minus reno costs guidelines… but when you are going for volume, it can be tough to find enough "homerun" deals.

At some point, I believe you are better off taking the doubles instead of passing and waiting.

So, when selling lower end homes around the $200-250k ARV mark, how much should you be reasonably looking to make on these flips? $20k? 30k? 50k?

Thanks BP!

[William Harvey]

We generally shoot for a minimum of $40k net profit or 10% profit based on the ARV, whichever is highest. We are very conservative on the ARV and to date we have only had a few flips come in below our target profit range. 70% ARV minus reno costs is a terrible strategy and will lead to not being competitive and losing out on offers. It is also very arbitrary and not logic-based. This is all my opinion.

Our strategy is to be EXTREMELY confident/conservative about the ARV and then shoot for $40k or 10% profit margin. If you're offering 70% minus reno, the price will likely end up being around 50% of ARV or possibly less. If we offered that in our market, sellers would tell us to get bent and never return our call.