Typical Purchase Price for a Good Flip Opportunity

[Sahil Tadwalkar]

I'm relatively new to flipping, but I understand that the majority of profits come from purchasing the property at the right price. I'm currently exploring SFH in the Bay Area, specifically San Jose. I think an 85% ARV seems reasonable and offers a small margin for profit, though I know some other flippers target 70-75% ARV.

With that in mind, what would you consider a typical purchase price as a percentage of ARV for a good flip opportunity in the markets you're familiar with? I'm asking this while excluding local market dynamics and lender requirements as much as possible.

Thanks!

[Tim Delaney]

If you buy at 85% of ARV how do you plan to make money on a flip? After closing costs and commissions which can easily add up to 10% in my market you'd be left with 5% and that is with zero work or holding coasts.

I analyze flips in real dollars, not percentages. Mostly because every house needs a different amount of rehab. If my sale price is going to be $300k less $25k commissions/closing costs less 80k rehab less $25k holding then I will only pay $140k for the house.