Flipping properties–buying, rehabbing, and selling to a retail buyer at market price–generates cash returns in chunks. Of course, with high reward comes high risk.
We mitigate these risks by keeping our costs below 70% of the After Repair Value (ARV). This means our purchase price + rehab costs are less than 70% of the property’s eventual expected sales price. This 30% spread gives us our desired profit and protects against unknowns.
Unlike what the flipping shows disclose on TV, we understand that carrying costs can be substantial and Murpy’s law always applies when flipping houses.