How much profit would you expect on a deal with an ARV of $850K ?

[Tyler H.]

So to keep this thread specific, my question is related to ROI expectations on a higher priced property. Should profit expectation rise with the price of the property?

Analyzing a deal with a client friend, here is the quick and Dirty. Sales Price, $725K. $150K down. Estimated repairs, holding costs until sale, AND cost of sale equals $800K. $4K monthly holding costs if time runs over "anticipated" duration.

Lets keep it simple, So basically every dollar over $800K is profit. Target sales price is $850K (possibly more). If all "goes as planned", a $50K gross profit would be expected. What are your thoughts? 2 or 3 months longer than planned, OR a 10K surprise during rehab brings profit down to less than $40K. (still 20-25% COC) It sounds like a good profit, but in relation to large sales price and holding costs makes me hesitant. Would be a no-brainer on a property less than $400K, but curious on others opinion who Rehab / FLip higher priced properties??

THANKS