How Much Money Can You Make Flipping Houses?
That is one of the most frequent questions I get about fixing and flipping.
In this video I talk about the profit potential from fixing and flipping houses, and I show you the checks that I just received from my most recent flip (which was sold just a few days ago). This house was purchased for $110,000, I spent around $25,000 repairing the house, and I sold it for $175,000. I was also the listing agent on the sale. The net profit on this fix and flip was a little over $34,000.
The interesting thing about this example, is that I purchased this house from a wholesaler for $110,000, but he purchased it from Hubzu for $100,000. You can see me in front of this houses on a previous video post (the one with the Hubzu sign). So a wholesaler made $10,000 flipping this house to me, and then I made another $34,000 fixing and flipping the house. The wholesaler had zero risk, he didn’t need to borrow any money or take any risk at all to make that $10,000.
If you are fixing and flipping houses for a living, then wholesalers can be a very lucrative source of finding deals. Case in point, if this wholesaler had not emailed me this houses, then I would not have purchased it. If you are fixing and flipping (or wholesaling) you should constantly be marketing to find more deals since you need to have deals in the pipeline and the more houses you flip, the more money you make.
When marketing for deals you should tap into as many sources as possible to find deals. We utilize Pay Per Click Marketing, Bandit Signs, Direct Mail, Facebook Ads, Postcards, Yellow Letters and of course wholesalers to find deals. I would estimate that more than 50% of our deals still come in through wholesalers and students in our Partnership Program. Remember that wholesalers and bird dogs can be your best friend if you are a rehabber. The wholesaler needs a cash buyer so that they can make a quick profit and the rehabber needs a good deal that they can fix and flip. Think about that synergy for a second and ask yourself when was the last time you went to one of the local real estate investor meetings in your area? You could be missing out on huge opportunities to meet other investors who could be bringing you deals or buying deals from you.
If you are starting out and you are short on cash then wholesaling is the best way to get started. The reason is simple. You don’t need any cash (or credit) to look for a house online. And if you find one and you flip it to someone then you are making money without having to put any money into the deal. All you need to do is find ONE house and flip it to someone and if you make a decent profit of $10,000 on that first deal, there is a very good chance you will soon want to quit your regular job. That is why I always recommend to new students that they first learn how to wholesale and flip houses before they jump into fixing and flipping. Remember wholesaling has ZERO risk.
When you are looking at a potential fix and flip deal and trying to decide if there is enough profit potentail for you to buy the house then a useful tool that can help you is the Rehab Property Calculator which I created for my students. You can access the calculator at this link: https://www.lexlevinrad.com/rehab-property-calculator/
The Rehab Property Calculator is also available as a free download in the app store (both Android and iPhone). Just type in “Rehab Property Calculator” in the store and you will find it (or click on the app store logo at the bottom of the page on the link above).