How do you make money flipping?

[Donald S.]

So, I hope this doesn't come off as whining or complaining. I'm purchasing a property in a few days, an up and coming neighborhood that is rife with rehabs and perfect for flipping. I'm trying to get my costs estimates from contractors, and so far I'm getting $75 to $80/sq ft. And that's after meeting with them, talking them through my plans etc. But selling costs in the area according to arv sold comps is only 85-90/sq ft. So how do I make it costs less to rehab? it would need to be about 60/sq ft to make a good profit. How do you rehabbers make the numbers work? this is a nearly full gut, floors stay, everything else goes. moving walls, new mechanicals, etc. also I guess I know now to draw up rehab plans before engaging contractors. Its been hard for them to give me estimates without knowing for sure what the layout will be, but architect plans run 3 to 10k from what I've found. any tips? Thank you, cheers!

[Caleb Heimsoth]

I think this happens in 3 major ways. 1. You buy the property at a huge discount. I’d say this is 50-60 percent ARV. 2. You do a lot of rehabs so your contractors give you better pricing.

3. You finish your home and push the arv slightly higher then originally estimated. This is sort of cheating but I have a feeling it happens a lot.