Expected Multiples/IRR for $1M SFH Fix-and-Flip Project with $400K Renovation (12-14

[Galant A.]

Hi BP Community,

I'm in the process of evaluating a fix-and-flip opportunity for a single-family home (SFH) with the following details:

• Purchase Price: $1,000,000
• Renovation Costs: Approximately $400,000
• Estimated Timeline: 12-14 months from purchase to sale

I'm trying to determine what would be considered "good enough" multiples and internal rate of return (IRR) for this type of project. I understand these numbers can vary depending on financing, market conditions, and other factors, so I'd appreciate any insights based on different scenarios:

1. All-Cash Deal: If this were an all-cash transaction, what multiples or IRR would you consider acceptable or ideal?
2. Financed Deal: Assuming 75% LTV on the purchase and a typical rehab loan structure, what returns should I aim for?
3. Market Considerations: Given the 12-14 month holding period, how much does your target IRR change in a fluctuating market (either rising or declining)?
4. Exit Strategy: If the flip turns into a hold due to market conditions, what would be your minimum acceptable ROI for a 2-3 year hold?

Any examples or rules of thumb you use in your own projects would be incredibly helpful. Thanks in advance for your insights!