Flipping in Sacramento Area

[Kristin Azam]

Hey all!!

I’m a new investor in the Sacramento, CA area. With the changing market, I’m just curious what flippers/rehabbers in the Sacramento area are shooting for in their purchase price to resale price ratio. In other words, what percentage or amount of net profit do you require when your analyzing a deal before you make an offer? I’ve heard from some people, “don’t submit an offer unless you will likely walk away with $50k profit after running the numbers.” Has that amount changed while preparing for the potential change in the market? Do you give yourself more of a safety net? Thanks in advance!

[Tapan Trivedi]

It differs from flipper to flipper. There isn't a single answer but allow me to segment for you. If someone is flipping only on the grid/East Sac/Land-Curtis Park etc then they are looking at higher price points and higher spreads (80 minimum). If they are flipping in Del Paso, Oak Park, North Highlands they may be willing to take 40-50k. Personally, I only see newbies take less than 40k and often see a lot of it evaporate due to either a seasonal market fluctuation or an ARV mistake.

HTH,

Tapan