Interesting newspaper article on flipping with interesting numbers in Vegas and nationally. Avg gross profits $59-66,000 before renos, fees, and taxes. Lot of risk for not much returns assuming average RE prices of about $225,000 in Vegas.

www.reviewjournal.com/business/housing/las-vegas-house-flippers-see-rising-profits-report-says/

LTD,

As you know, Las Vegas is the gambling capital of the world. Could a Vegas RE flipper get better odds sitting at Blackjack table?

I don't think that too bad of a return for that sales price of a house.

We sell houses in the 125-150 range for a profit from 25-40 mainly. So I would say the ratio is similar.

I would assume our market is much more stable that Vegas.

Re-reading it again, what do they mean profit BEFORE Reno?

Are they counting the profits before renovation is being done? That doesn't really make sense to do.

Also, how could they really know this information?

The last three paragraphs:

The company reported that Las Vegas-area flippers booked average gross profits of $59,503, giving them a 36.5 percent return on investment, in the three months ending Sept. 30. That’s compared with gross profits of $46,516, and a 30.4 percent return, in the same period last year.

Nationally, flippers booked average gross profits of $66,448 in the third quarter, for a 47.7 percent return, compared with $65,000 in gross profits and a 51.2 percent return a year earlier, Attom reported.

Those profits represent the sales price minus the purchase price and do not account for renovations or other costs the sellers may have incurred.

---Excellent catch, NE. I think it's basically saying, "We were tracking these in the MLS database, and saw a house for sale for $x, and then within a year later it's for sale again for $y. So we're just going to pretend that that's the buying price; that's the selling price; and if any improvements were made, let's just ignore those costs and run the math."

"Those profits represent the sales price minus the purchase price and do not account for renovations or other costs the sellers may have incurred." So they have no idea what the actual profit point is??

We shoot for $25K to $40K profit on any house we do & have a hard time getting over the $30K hump. The sweet spot here is up to about $85K selling price. We average between $15K to $20K material costs. Pickings are slim right now. We take on the houses that have sat for 3 years because the whole town "knows there's something wrong with it" but there isn't other than it's ugly & hasn't been touched in 30 or 40 years.

Government isn't the only provider of subsidized housing. Landlords and flippers come out of pocket a lot of the time.

LOL - Roy - Yeah, counting cards in Vegas, there's a great investment plan. ;) I've been trying to motivate the rocket scientist to crack the Keno algorithym so we can move over to Easy St. ;)

I was shocked at the article. As everyone here has already noticed, the "journalist" ignored completely the costs of renovations, the carrying costs (interest, taxes, utilities, insurance, ...).

I have looked at some of the houses that were available for purchase, and I would guess that the renov cost plus carrying costs are about $20K. Even with low-cost realtors involved, the profit margin is too thin for me to gamble on. "Come on, seven!"

Most "flippers" that I see make very little or no money.

Despite not making a dime, I am sure Uncle Sam is first in line trying to get his share of the pie.

If a flip is a simple paint and carpet it can still run 20,000 in cost

The problem with the article is that it isn't really about "house flipping" in the traditional sense. It's a horrible title and pretty bad article.

This article is really just about the real estate market IN GENERAL there. It is going up. A bit more than last year.

It is about people buying houses and then reselling them at a higher price. So, a tiny part of what "house flippers" do.

The vast majority of the world, when you say "house flippers" thinks "buying something that needs work, fixing it up, and selling it for more BECAUSE OF THOSE RENOVATIONS." Instead, this article is about "buying something that might not need any real work, doing little to it, and selling it for more BECAUSE THE MARKET SUPPORTS HIGHER PRICES DUE TO APPRECIATION."

Most people don't think of flipping that way. The author is either ignorant or is abusing the term on purpose to attract readers.

- John...