Getting Flips to Pencil // Return Thresholds

[Adam Sharp]

Hi team, I have been analyzing deals for 6mos and haven't pulled the trigger on a flip yet. Primarily this was due to the fact that I didn't have the right pieces in place (LLC/Lender/GC/Broker/etc). Those pieces have been solved for - so now I am really digging in and ready to execute.

My issue now, is determining when the math makes sense to hit the "GO" button.  I have included my spreadsheet below which I would LOVE feedback on.  But here are my questions.

- What ROI do you view as acceptable for a "GO"

- Is $10k net before taxes enough, based on $110k cash in, to move forward?

- How do I get comfortable with unforeseen risks (sewer problems, unknown foundation issue, roof etc) that ay come up once I crack into the walls?

- I cant figure out how to get my Net large enough to provide the comfort I need to cover these unforeseen costs/risks

I guess my overall question is - am I being too risk averse? are these standard returns? Is my model flawed in the way I am looking at opportunities? And how can I change my lens/optimize my model to increase the Net?

When I look at this - my biggest kick in the gut is the commission piece on exit, so I am getting my license renewed to reduce that - but I think the questions above still warrant discussion.

Appreciate the feedback in advance!

Thanks!!

[Jaron Walling]

Ask yourself is that enough for the amount of TIME you put in? Don't forget the BRRRR and rental cash-flow if the market supports it.

If you're not touching tools, calling the contractors, and walking the project 3 times a week sure it's great. As an investor that gets my hands dirty to learn the basics of rehab $11k (before taxes) doesn't cut it. For the example you're showing that's too low. That's like a 10% return with no long term gains, tax benefits, etc. I think the spread is pretty tight so I would negotiate harder or keep hunting. Good luck man!