80/20 principle for flipping

[Eric James]

I listened to BP podcast 217 on the 80/20 principle with regard to RE, and am also familiar with how this principle applies in a number of areas outside of RE and business. The general principle is that 80% of profits come from 20% of your actions (e.g. time and money spent).  How do you see this applying to flipping RE?

I’ve seen a number of people post photos on BP of beautiful, highly detailed renovations they have done on flips.  The 80/20 principle says that only 20% of the work done created 80% of the profit. There is no question that spending less time and money on renovations will lead to a lower sales price, but the idea is that you can spend 80% less and only decrease your profit by 20%.  Do you find this to be the case, and if so, how do you apply this principle to flipping?

I have done a few flips and generally try to keep my renovations to basic things that I think will bring the most return, but am wondering how others may apply the 80/20 principle to flipping.