Fix and flip project criteria

[Brendan Henry-Lambert]

Hey BP community! Experienced rehabbers, I am curious:

1) What is your criteria for a fix and flip project (such as age of the property, location, size/cost of the project, etc.)?

2) Why is this your criteria? Does this make it easier to identify and make offers on potential deals? 

3) How can I develop my own fix and flip criteria catered to my market (specifically Baltimore, MD)?

Thanks! Brendan. 

[Laura Alamery]

@Brendan Henry-Lambert

If you are new to fix and flips, I would recommend going for the easier projects: single family homes, in good stable areas in a medium income neighborhood. I call these the "bread and butter homes," where most buyers will probably use an FHA loan or conventional.
These areas will attract the larger buyers' base (owner occupants and also landlords.)

As far as criteria, I personally want to make at least 10% of the final resale price. So if the property will sell after fix up for $300,000, I want to make $25k to $30k, otherwise I will probably just wholesale it and let someone else take up the project (wholesale for about $10k profit.) When you fix and flip, you have to take in consideration changing times and fluctuations in the market, therefore in order to take up the project I need to have a cushion of at least 10%.

It all comes down to what is your comfort zone. Do you have contractors and financing in place? Do you think you can turn around properties pretty quickly? 10% profit based on resale value is pretty standard average across the country, but I have seen higher or lower, depending on personal criteria.