Who cares what someone will spend, got to look at the ARV and cap rate.

Far to broad of a question to answer.  Every seller and situation is unique. 

Newbies tend to spend too much.  THey want to make it perfect, like the TV shows that have a budget and discounts from vendors because they mention them on the shows.  Newbies may not take into account the type of neigborhood:  for example on my first flip in a low budget neighborhood, I almost ripped out and redid a cement patio befcause there was this huge crack in it and one half was lifting up.  I ended up shaving it to even it out and sealing up the crack with more cement.  The buyer said"  Wow, there is a patio"  no complaint that it wasn't perfect, because it was a low end neighborhood.  But  did redo the bathrooms!

depends on the square footage of the house,  one of my investor puts in $30,000 as a limit and she does great at making a great profit margin.

that depends on the marketplace and how much they paid for it...often, they pay too much....

Although your question addresses the point of greatest interest to flippers, it is not the right question that determines to too much/too little concern.

PROFIT is made on the acquisition cost. The magic is how to get a homeowner to sell the house for $50,000 below market value. It as simple as that.

Very likely, on a TV near you, are ads for organizations (investors) offering to purchase homes directly from the owner. (offerpad) Analyze the PROMISE being made by these groups and you will see what the consumer is WILLING TO BUY.

Sellers are happy, investors are HAPPIER. 

Now, to specifically address your question, "Is there a rule of thumb?" and the answer is yes.

There is no rule of thumb except you need to be the cheapest buyer of all types.

There's no rule of thumb. It depends on the investor's desired yield, the market, ARV, and the individual property.

No rule of thumb.   It's all about the profit margin.  

That totally depends upon the market, the property and the buyer's tolerance and demands for investing. There's no rule of thumb here - each investor is different...as is each property.

Flipping has pretty much disappeared in our market. Property is too expensive from the start.

You should be shooting for a 15% ++ profit

That is up to the homeowner on how much they want to spend.   I don't work with flippers though.   I have investors that hold and rent them.

How could you possibly have a rule of thumb? Some homes require cosmetic renovations while others require major overhaul. You couldn't possibly create a general rule based on dollar amounts or percentages.

Kathleen Daniels nailed this one!

Virgie Vincent - it depends!

No rule of thumb, just a spreadsheet that fills in the components

Purchase Price+repairs+carrying costs+risk or profit=sales price

Virgie,

It depends on the marketplace and what they are buying, where, etc, and they should review with their CPA.  There is a lot more to flipping than many see on HGTV

These houses are not cookie cut and are all different.  How do you set a price when they are all different.

I do not advise on that, that's up to them.

I put them in touch with good tradesmen though.

Typically newbies over spend, experienced spend what pencils out.

People who flip have formulas that they go by....

Every home is different. We have flipped many homes over the years and I've seen it all.  Working on 3 right now and one needed about 8K, one about 15 to 16 k and the other one is too early in the process to know but I'm guessing closer to 30 or 40. We have a team of folks that work on these for us and we've got it down pretty good. Something always POPS up so make sure there is a contingency budge.

If the required profit margin is there, there is no limit.

I deal with seasoned investors and they take each situation and evaluate it. There is no stock answer.

Yes, as much as is neccessary to make it look good and turn a profit.

        More important, do they have experience and know what they are doing?  Or did they "see it on HGTV"?  I have seen beginners buy houses they thought could be fixed up; those houses turned out to be tear-downs.

It is rarely heard that flippers spend too much money, unless they have no experience at all. In my area, a lot of flippers now invest in expensive finishes. This is what consumers are looking for( since housing very expensive, buyers hate cheap finishes, they are willing to pay more for quality). 

I have no opinion nor do I consider what they are spending on anything regardless of purpose.  My major concern is the customer's ability to pay for my services.

Too much because they find things they couldn't see before the remodel. Some people just go nuts with granite etc when the market won't give a return on that.

It depends on the house. I as well buy, fix and sell homes and also have many cash buyers i work with. I have some that just want to do paint and carpers and others that only want to buy the homes that need to be gutted. Some investors say the rule of thumb is 15% return based on sales price, i like to calculate every home separate to see if it makes sense

 I do not even identify properties unless they show me their wallet. Here in CA I have seen 2-5M cash/ hard money.  They want pay as little as needed often working with several agents simultaneously.

That always depends on the ROI for the investment made, Some improvements give a better return than others but it is always relative to the respective market area as the home still should comp out.

Virgie Vincent No rule of thumb.

Depends on the house and quality of the neighborhood.

I find that most flips, look good until you look closely.  Most flippers go for cosmetics and leave the old rusted stuff there...

Eve

They need to do what they need to do. No hard and fast rule!

Interested to see what others have to say, and I would think it depends on what profit margin the investor needs. I don't work with flippers in my area. And the prices can make it a challenge

I have no rules of thumb for most anything. And I don't work with flippers.

It is very easy to spend too much money and end up with a loss.

You need to have a good idea of your costs before you purchase a property to flip.