How much profit can you make on average flipping houses? - Question on Quora.com
Generally speaking as a rule of thumb, house flippers shoot for an average of 15% Profit of the ARV.
So on a property with a $250,000 resale value, the profit would be $37,500.
However, this profit amount will vary depending on several factors:-
- Difficulty of rehab - An extensive gut rehab should have more profit, then an easy cosmetic rehab
- Length of Rehab - The longer the project takes, the more profit you should make.
- Location/Competition - Right now the market is very competitive, so in certain markets, in order to acquire property flippers are only building in ~10% profits.
- Market Conditions - Is the market a seller’s market or a buyer’s market? Are prices trending down or up? If prices are dropping, you need to build in more profit to account for the downside. In today’s appreciating market, you may need to be somewhat speculative.