Most people believe that you make your profit when you sell the house, but I think it’s the other way around – You achieve profit from the moment you get a good deal. One of the biggest question’s I’m asked is: “What price point provides the best profit?” And frankly I don’t believe there is an answer. Sometimes the profit is relative to the investment but I believe that it’s about knowing your market and being able to recognize a good deal. Interestingly, for the first time ever I’m doing my cheapest flip with a purchase price of $52k and my most expensive flip with a purchase price of $890k (Trust me – My piggy bank isn’t that big, there are investors involved!). Both flips will provide a great return relative to the investment that they require. However, the thing is that most people think you need a lot of money to flip, when really you just need to be able to recognize a deal… And the only way to do this, is to understand comps. The term “comps” is short for comparables and it refers to comparable sales (same square footage, similar design, same zip code and/or within a 1/2 mile radius)… If you see a distressed property for sale near a home that recently sold for almost double the price – You know that’s a good flippin’ deal!
MY FLIP TIP: Have a Realtor set up an MLS portal for you. It’s a great way to keep track of properties as they are listed and sold. Zillow is also a great tool – Not always accurate for active properties, but pretty decent to check comps on homes recently sold.