When you watch the TV shows, it looks super simple to flip a house in a couple of weeks for a $100,000 profit. Don’t believe everything you see on TV. If the real estate investing mantra is location, location, location, the mantra for flipping is do the math, do the math, do the math.
Flipping by the Numbers
When you define flipping a house as buying and selling within six months, RealtyTrac numbers show that 156,862 single-family homes were flipped in 2013. Calculating the final selling price from the original purchase price reveals that the average flip grossed a $58,081 profit. However, that doesn’t account for the cost of rehabbing the house and other standard expenses.
Assuming the rehab cost averages $25,000, the 6 month profit would be $33,081 ($58,081 – $25,000). A 6 month flip would mean an average monthly profit of $5,514. If you can reduce the flip time to 4 months, the monthly profit goes up to $ 8,270. Neither are numbers that you’re going to become insanely wealthy from but still it’s a decent living wage.