Some questions to get started with flipping

[Sharad M.]

Hello all,

I have some questions for experienced flip investors:

1) While calculating your ARV, is there a minimum number of solid comps you look for?
2) How far do you look for comps when calculating your ARV? 1/4, 1/2 mile radius?
3) When you list your property for sale, how many active listings do you usually compete against in your market?
4) Which of the following financing would you use:
a) Use your own money?
b) Use HML at about 18%?
5) For members who have done multiple flips, have you lost money on any? If yes, what were some of the reasons? Overestimating ARV, underestimating rehab costs, etc.?

Thank you in advance for your replies.

[Aaron McGinnis]

1) I would like to see at least 3-5. That's what an FHA appraiser is going to look for.
2) Within the neighborhood. If I have to exit the neighborhood, I want to stay within a mile.
3) Typically between 5-15.
4) My own money. That's some expensive HM right there.

5) Of course I have. The times it has happened have been when I got caught by market forces... the end of the tax credit was the most recent example. The whole zip code of a project we were in took a nose dive and lost about $60,000 worth of value in a matter of months.