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The REAL profit margins when flipping houses.
[A Thread]
As someone who flips houses for a living, it’s IMPERATIVE I have a formula that I use to determine how much profit I can make per property after ALL fees.
Here’s an example
[A Thread]
As someone who flips houses for a living, it’s IMPERATIVE I have a formula that I use to determine how much profit I can make per property after ALL fees.
Here’s an example
Here’s what it DOESN’T look like 
You buy a house for $150,000
The rehab costs you $50,000
You sell for $270,000
Profit - $70,000
You buy a house for $150,000
The rehab costs you $50,000
You sell for $270,000
Profit - $70,000
Unlike wholesaling, there are various fees (FIXED & VARIABLE) that cut into your profit margin. You must become a master of becoming precise with your estimate so you don’t lose on a deal.
You’ll never know exactly how much you’ll make, but here’s some fees you can expect
You’ll never know exactly how much you’ll make, but here’s some fees you can expect
Take your acquisition cost $150,000 and add it to:
• Realtor fees (6% of sale price)
• Rehab cost
• Lender interest(cost to borrow money)
• Lender points (upfront fee)
• Property taxes
• Holding costs (water, gas etc)
• Closing costs
• Realtor fees (6% of sale price)
• Rehab cost
• Lender interest(cost to borrow money)
• Lender points (upfront fee)
• Property taxes
• Holding costs (water, gas etc)
• Closing costs
Now let’s break it down. If you pay 6% to your realtors (buying and listing agent) & sell for $270,000
That’s $16.2k lost OFF RIP.
Lender fees can vary but I would say budget around $10k-$15k. (HARD MONEY AINT CHEAP!)
Taxes ~$1,000
Holding costs around $500-$1k
That’s $16.2k lost OFF RIP.
Lender fees can vary but I would say budget around $10k-$15k. (HARD MONEY AINT CHEAP!)
Taxes ~$1,000
Holding costs around $500-$1k
Closing costs are tricky. You could pay NOTHING but I always do WORST CASE SCENARIO.
Your buyer may negotiate for you to help pay closing costs or pay towards some repairs in the house.
I budget around $5k, but hope to pay nothing.
Your buyer may negotiate for you to help pay closing costs or pay towards some repairs in the house.
I budget around $5k, but hope to pay nothing.
So let’s add up the “extra” fees
$16.2k - Realtor +
$12k - Lending costs+
$1k - Taxes +
$1k - Holding costs +
$5k - Closing costs
That amounts to around $35,000!!
Leaving your profit at around $35,000
Still a banger deal for 90 days work but this is the reality.
$16.2k - Realtor +
$12k - Lending costs+
$1k - Taxes +
$1k - Holding costs +
$5k - Closing costs
That amounts to around $35,000!!
Leaving your profit at around $35,000
Still a banger deal for 90 days work but this is the reality.
BONUS GAME 
I’m a realtor, so I LIST MY OWN HOUSES and save around $7k-$10k per deal.
When I’m able to buy homes cash, I’ll also save the $10k of financing fees.
That extra $20k per deal will take my business to the next level.
These are the raw numbers
I’m a realtor, so I LIST MY OWN HOUSES and save around $7k-$10k per deal.
When I’m able to buy homes cash, I’ll also save the $10k of financing fees.
That extra $20k per deal will take my business to the next level.
These are the raw numbers
Congrats! Now you know the general raw numbers when it comes to flipping houses for profit!
Have any question? DM me on here or hit me on IG @AgentDooley
Have any question? DM me on here or hit me on IG @AgentDooley
