If you invest in realty, you’ve probably heard the phrase “managing your real estate pipeline.” A real estate pipeline template or visual is similar to a sales funnel, and accounts for each aspect of the home flipping or building process.
For investors, real estate pipeline management can include analyzing market conditions, building a network of professionals, engaging with prospects for home buying and selling, and so much more. To establish a fluid real estate pipeline, it’s important to know how many investment projects you can take on.
While real estate investment firms can perform hundreds or even thousands of investment projects each year, smaller, non-corporate investors lack the resources and funding to undertake such endeavors.
So, what is the ideal number of fix and flip or new-build projects for small- and medium-sized builders and investors? Below, we’ll discuss the ideal number of flips for each stage of investing and share the factors to consider. We’ll also provide tips to scale your business while maintaining a fluid real estate pipeline.
For investors, real estate pipeline management can include analyzing market conditions, building a network of professionals, engaging with prospects for home buying and selling, and so much more. To establish a fluid real estate pipeline, it’s important to know how many investment projects you can take on.
While real estate investment firms can perform hundreds or even thousands of investment projects each year, smaller, non-corporate investors lack the resources and funding to undertake such endeavors.
So, what is the ideal number of fix and flip or new-build projects for small- and medium-sized builders and investors? Below, we’ll discuss the ideal number of flips for each stage of investing and share the factors to consider. We’ll also provide tips to scale your business while maintaining a fluid real estate pipeline.
Finding the Ideal Number of Flip/Build Projects
Home flipping profits continued to rise in 2024, with a 30.4% profit margin in Q2–roughly an average of $73,500 in earnings per project. Additionally, with new build projects in high demand and grossing nearly 20% returns on average, it’s never been a better time to be a real estate investor.
But how many houses can you flip/build in a year?
Ideal Number of Houses Flipped/Built per Year by Investor Type
Investor Type | Ideal Number of Investments | Profit Margins |
Amateur | 1 – 2 | $73,500 – $147,000 |
Part-Time | 3 – 6 | $225,000+ |
Professional | 12 – 50 | $800,000+ |
For amateur investors, an additional $70,000+ annual income stream probably sounds great and should be your goal early on. On average, house flipping and new build projects take three to six months, depending on factors like rehab costs, market conditions, and even weather.
For novice investors unfamiliar with the intricacies of real estate investing, it’s fair to assume this process can take even longer. Amateur investors often lack the resources and funding to take on more than 1 to 2 investment projects a year. Instead, amateur investors should focus on enhancing their knowledge and skills in various real estate pipeline stages early on.
This can include:
- Building a solid business plan
- Enhancing your market research
- Educating yourself on money pitfalls and things to avoid
- Improving your property analysis (Analyzing ROI potential)
- Beginning to build relationships with other industry professionals
With a few successful flips or builds under their belt, an established and fluid real estate pipeline, and enhanced industry knowledge, skills, and relationships, an amateur should look to level up to a part-time investor.
With a tried and true business plan and enhanced skills, part-time investors can move through the flipping/building process with greater speed and accuracy. At this point, they have also established various income streams and financing credibility, and have cultivated crews and systems that give them the resources and speed to take on more projects. As a part-time investor, you should look to take on 3 to 6 flip/build projects a year while continuing to enhance your real estate pipeline management, grow your network, and expand your business’ reach and resources.
Lastly, there is the professional investor. Professional investors have multiple years of experience, a fluid and successful real estate pipeline system, and an established team of essential fix and flip/new build players (agents, contractors, lenders, etc.) helping them succeed and expand. Professional investors have turned their hobby into a full-time business, taking on 12 to 50 projects annually, with an average annual profit margin of over $800,000. Not bad!
With a tried and true business plan and enhanced skills, part-time investors can move through the flipping/building process with greater speed and accuracy. At this point, they have also established various income streams and financing credibility, and have cultivated crews and systems that give them the resources and speed to take on more projects. As a part-time investor, you should look to take on 3 to 6 flip/build projects a year while continuing to enhance your real estate pipeline management, grow your network, and expand your business’ reach and resources.
Lastly, there is the professional investor. Professional investors have multiple years of experience, a fluid and successful real estate pipeline system, and an established team of essential fix and flip/new build players (agents, contractors, lenders, etc.) helping them succeed and expand. Professional investors have turned their hobby into a full-time business, taking on 12 to 50 projects annually, with an average annual profit margin of over $800,000. Not bad!
Home Flipping/New Build Factors For Success
While real estate investing is profitable, success and growth within the industry are not guaranteed. A successful home flipping and new build real estate pipeline, and ongoing business growth, depend on several variables, including the right location, favorable market conditions, and sufficient capital.
Location
Nothing will influence the success of an investment business more than a property’s location. While beginners often start investing in local real estate markets, it’s important to understand the demand and potential in the area you are investing–especially as you grow.
- Is the area expanding?
- Are there attractions, nightlife, and restaurants for families?
- Are businesses and job opportunities coming or going?
If local markets don’t offer these signs of growth and opportunity, experienced investors should venture into markets in other regions or expand beyond state lines.
Market Conditions
This year has been exciting and lucrative for investors, especially given the country’s lack of inventory and need to meet home demands with new construction investments. It’s a builder’s, flipper’s, and seller’s market. However, this can make it difficult for investors to find the right deal.
This is why a tried and true business model and solid real estate pipeline are essential to success. As markets become more saturated and opportunities more scarce, it’s important to stick to a plan and not overextend, so as to avoid taking on too much risk. With the right team, patience, and planning, there are always profitable and worthwhile opportunities available.
This is why a tried and true business model and solid real estate pipeline are essential to success. As markets become more saturated and opportunities more scarce, it’s important to stick to a plan and not overextend, so as to avoid taking on too much risk. With the right team, patience, and planning, there are always profitable and worthwhile opportunities available.
Capital
“To make money, you have to spend money.” This old adage holds true for the real estate investment market. Fix and flip/new build businesses require reliable and accessible cash at all times.
Traditional lenders, like banks and credit unions, are highly regulated by governments and institutions like Fannie Mae and Freddie Mac, and are less favorable to investors–especially those with bad credit or a lack of liquidity. That is why savvy and experienced entrepreneurs rely on fix and flip and new construction business loans through private lenders. With less oversight and more freedom, private lenders can provide:
With enhanced freedom and more ways to say “yes,” private lenders provide the speed, flexibility, and accessibility necessary to build a successful real estate pipeline and grow your business.
Traditional lenders, like banks and credit unions, are highly regulated by governments and institutions like Fannie Mae and Freddie Mac, and are less favorable to investors–especially those with bad credit or a lack of liquidity. That is why savvy and experienced entrepreneurs rely on fix and flip and new construction business loans through private lenders. With less oversight and more freedom, private lenders can provide:
- Flexible financing
- Fast approval times
- No pre-payment penalties
- Eligibility for bad credit borrowers
- Plans approved with little to no money down
With enhanced freedom and more ways to say “yes,” private lenders provide the speed, flexibility, and accessibility necessary to build a successful real estate pipeline and grow your business.
Finance of America Commercial: Flexible Financing for Real Estate Pipeline Success & Growth
Finance of America Commercial (FACo) offers the most reliable short-term new build (construction loan) and fix and flip loan options on the market. With flexible terms and prepayment options, we have the capital and speed to help with real estate pipeline success, whether you are buying, building, renovating, or selling a property.
Find out why FACo has been a trusted partner in helping investors grow their businesses. CLICK HERE to schedule a FREE consultation with a team member today!
Find out why FACo has been a trusted partner in helping investors grow their businesses. CLICK HERE to schedule a FREE consultation with a team member today!