How Much Profit Should You Expect When Flipping a House?
The amount of profit or return on your investment that you should expect from a flip will vary depending on the real estate market that you are in and how extensive of a rehab the property requires.
As a general rule of thumb;
Most flippers in the Guelph area aim to make a 20% or higher return on their investment when flipping a house. If you are spending $200,000 in costs then you should walk away with around $40,000 after all your expenses.
However, if you are taking on a complicated flip with a large renovation and long carrying time this is a larger risk meaning you should look for a higher return then 20%. On the other hand, you may buy a house where you only have to do a few cosmetic repairs that will be low cost/time and for that home, you might only need a 15% return to make it worth your while.
When calculating your return it is important that you factor the additional expenses above and beyond the renovations such as carrying costs, financing, real estate fees and your time.