Return on investment for a flip

[Brian Hall]

What is the minimum expected return on investment you would do a flip for in Southern California?

[Jay Hinrichs]

Originally posted by @Eric M.:

All depends on how much time and work is involved and how much money is at risk. Some people will do a flip for 5% net profit, some look for 25% or more home runs. Average is probably 15% or so. Less as the house gets more expensive like on SoCal.  Maybe a typical SoCal might be 500K buy, 100K rehab, NET profit 60-80K, some higher, some lower.  A lot of people will do that flip for a 30-40K profit with the market weakening.

In theory I might do a low risk cosmetic million dollar flip for the same profit as a full gut on a 100 year old 200K house. So it all depends.

 I was at a conference last spring in San Deigo and talking to one of the larger LA basin flippers.. he said its so competitive there.

they did 80 flips in a little over a year with average sale prices in the 600 to 900k range and average profit 15k per house.

thats a ton of debt and risk to make 1.2 million.. Ton of risk and work..  I said to him.. thats exactly why i got out of courthouse steps in Oregon as the profits went down like that .. it was better to just be the lender.. less work less risk and profits are better.