I have flipped more than 155 houses in my career, and while I am still learning, I have figured out a few things over the years. One mistake I see many new flippers make is in how they remodel a house. To make the most money flipping houses, the simpler a flip is, the better.
We all see the HGTV and TLC shows where a team rebuilds every house to make $50,000 each time. But that is not reality. The house-flipping shows don’t show us the behind-the-scenes details, the true costs or how much work goes into a home rehab. While a massive remodel makes for great TV, it usually does not make for a great investment in reality.
How much money can you make on a house flip?
Real estate data company ATTOM reported the average profit on house flips in the United States was $65,520 in the second quarter of 2018. But ATTOM also notes that this is most likely not an accurate number to use for what professional flippers make on each deal, as the figure takes into account all houses (flip properties or not) bought and sold within the year, and only factors the purchase price minus the selling price. Any experienced flipper will tell you that those are not the only important numbers.
Personally, my flips average about $30,000, and I suspect that is a pretty accurate number for most house flippers I know. The number decreases with lower price range flips and increases if you are doing high-end flips.
Why does a massive remodel usually not pay off for house flippers?
I have done flips that needed almost no work and flips that needed $100,000 remodels. The big jobs always seem to have the biggest potential profit in the beginning, but something always happens to eat up that profit. Big remodels take more time, more money and more resources. If you have contractors working on one house for six months, that limits how fast you can get other flips completed. Here are some other problems you may run into with massive remodels:
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