High end house flipping usually produces a wider margin than entry-level flipping, not a thinner one. Jason Nguyen of DK Concepts runs both in Orange County, California, and his own numbers show entry-level projects clearing $50,000 to $80,000 at roughly 5% of ARV, while his Huntington Beach and Costa Mesa projects at around $2 million ARV are penciling at 8% to 10% and $100,000 to $170,000 per deal.
The reason is competition, not construction. Wholesalers chase volume where the volume is, buyers at the entry level have lost purchasing power to rate hikes, and the $2M ARV band sits mostly untouched. That changes where you source deals, who you hire, and what actually limits your growth.
Below: the margin math, why MLS deals still convert in that band, what changes operationally when you trade up, and the capital constraint that replaces deal flow as your bottleneck.
Key takeaways
- Jason Nguyen’s entry-level Orange County flips produce $50K-$80K per deal at about 5% of ARV; his premium Huntington Beach and Costa Mesa projects pencil at 8-10% and $100K-$170K.
- Wholesalers concentrate on entry-level inventory because that is where the volume is, which leaves the $2M ARV band open to buyers willing to source off the MLS.
- Accepting a predictable 6-10% of ARV instead of holding out for 12-13% is what makes MLS listings usable; most investors skip them because they want a slam dunk.
- Selective offering beats blanket offering: roughly five targeted offers, one to two accepted, with the misses lost to owner-occupants and rental buyers underwriting future value.
- At higher price points the bottleneck becomes cash reserves and lender caps, not deal flow. A Kiavi-style cap around $8M sets a hard ceiling on concurrent projects.
From the Real Estate Pros Show
This article draws on an interview with Jason Nguyen of DK Concepts LLC on the Real Estate Pros Show, hosted by Souk K.
The Margin Gap Between Entry-Level and Premium Flips
Jason Nguyen’s side-by-side numbers are the clearest argument for moving up the price band. On entry-level Orange County homes, DK Concepts has been averaging $50,000 to $80,000 profit per deal, which works out to roughly 5% of ARV. He calls that segment a bloodbath.
On the premium projects the partnership is running now in Huntington Beach and Costa Mesa, around $2 million ARV, they are pushing 8% to 10% of ARV, sometimes more, with $100,000 to $170,000 per deal on paper.
Margin percentage is the number that matters when you scale, not the dollar figure. Dollar profit tells you what one deal paid. Margin tells you how much cushion you have when the comp comes in 3% light, when the rehab runs four weeks long, or when you hold through a soft month. A 5% margin gives you almost nothing to absorb a miss with. Double it and a bad surprise costs you profit instead of costing you the deal.
The reason the premium projects carry better margin is not that the construction is easier. It is that there is less competition, so DK Concepts can bring a better product to market and ask slightly above the expected ARV and still sell. In the entry-level band, every investor in the county is bidding on the same house, and the winning bid is the one with the thinnest margin.
Jason’s stated 2027 target follows from that math: 10 to 12 exits at premium price points, which at 8-10% puts the business around $20 million in revenue. Same deal count as a volume operation, very different profit per unit.
Why Competition Thins Out Above the Entry-Level Price Band
Two forces clear the field above entry level. The first is rates. Buyers in Orange County’s entry-level cities — Jason names Garden Grove and Westminster — have been hit hard by the interest hike and simply have less purchasing power. Costa Mesa and Huntington Beach buyers remain financially capable, so demand at that band held while the bottom slowed.
The second force is where wholesalers put their marketing dollars. Wholesalers work entry-level inventory throughout the region because that is where the money and the volume are. Jason’s experience is that waiting on wholesalers for $2M ARV product in his two target cities leaves him, in his words, dry to the bone — what comes through instead is LA inventory in less desirable areas that misses his buy box entirely.
That gap is the opportunity. As he puts it, wholesalers not targeting his price band leaves a whole playground.
Worth calibrating your own market against: in Costa Mesa, a $2 million ARV house is not luxury. One of DK Concepts’ current projects is 1,800 square feet on a 6,000 square foot lot, close to $2M ARV, and functions as entry-level product for that city. “Premium” in your market may be a very different absolute number than someone else’s, and the strategy travels better than the price point does.
The practical test is not “is this an expensive house.” It is whether the buyer pool at that price is still financially capable while the investor pool competing for the acquisition has thinned out.
Wholesalers don’t target those. Which is great, because now it leaves a whole playground for us.
— Jason Nguyen, DK Concepts LLC
Sourcing: Why MLS Deals Still Work When Everyone Says They Don’t
Flipping houses off the MLS works because most investors refuse to look. Jason’s read is blunt: investors have decided MLS is trash and do not underwrite what is sitting there, because they want the moon — a slam dunk at 12% or 13% of ARV on every deal. He takes 6% to 10% instead, on the grounds that it is a safer, more concrete number in an area he knows well.
His offer discipline is what makes the conversion rate work. Rather than blanket-offering, he selects roughly five properties over a weekend and writes on those. One to two typically land.
The three that miss usually miss for reasons he cannot control:
- Owner-occupants who will pay retail to actually live there
- Rental investors underwriting future appreciation rather than current profit, who can simply outbid a flipper
Notice what is absent from that list: bad offers. The losses are structural, not fixable through better negotiation, which is why Jason’s own rating of the sales process sits around 6 out of 10 with no obvious improvement lever.
His sourcing relationships split unevenly. He rates his wholesaler relationships 7 out of 10 — built largely through phone calls proving he is legitimate, plus weekly social posts that function as a resume rather than a brand play — but he buys few deals from them at his price band. Agent relationships he rates 1 out of 10, having bought nothing from them. He is also deliberately not prospecting harder right now, because with three projects running and capacity for two or three more, blasting agents and then failing to perform would cost him credibility he cannot rebuy.
What Actually Changes Operationally When You Trade Up
Four things change when you move up the price band, and none of them are optional.
Contractor taste becomes a selection criterion. Premium finish work requires a contractor who specializes in it. At entry level, Jason notes, you can hire less specialized crews and still hit the number. At $2M ARV, the finish is the reason you are getting a premium price, so the trade partner has to have taste, not just capacity.
Use a local listing agent in that specific pocket. This is the decision Jason says he would take back. He holds a license and assumed he could handle the listing himself. His own assessment: “I was a little bit egotistical, thinking that since I’m a realtor, I can just look it up myself, but a lot of the time, I can’t.” His advice is to talk to a local agent in that micro-market before you buy anything, not after.
Narrow your geography until your market knowledge beats the competition. DK Concepts works two cities. In a market as dense as Orange County, each pocket has its own comps, its own buyer, and its own play. That narrowness is what lets Jason look at an MLS listing and know immediately whether it will draw competition at that price in that zip code.
Plan for a 6 to 8 month hold. Larger projects carry longer. That is real money in interest and carrying cost, and it is the tradeoff against the bigger spread.
At higher price points a fifth path opens: buy a Costa Mesa lot, tear the house down, build new, and resell. More capital, more timeline, more predictable output.
The Real Constraint: Capital, Reserves, and Risk Tolerance
Ask Jason what keeps him up at night and the answer is not deal flow. It is cash flow and risk tolerance. DK Concepts does not have a sourcing problem at its current size. It has a capital problem, and that is the constraint that shows up when you trade up.
His stated goal is to be able to carry six to eight projects at roughly $2 million each and still sleep — meaning enough reserve that if something breaks, he can feed his family, not screw anyone over, and absorb the loss. That is the right way to size a reserve target: not a percentage rule, but the number at which a bad outcome is survivable.
Financing sets the hard ceiling. DK Concepts currently has 100% financing, but lenders approve borrowers up to a cap — Jason cites a Kiavi cap around $8 million. That cap, not the number of deals on the MLS, determines how many projects you can run concurrently. Right now the operation can handle five, at most six, on manpower and capital combined.
One tactical use for that financing, from Souk K: tell the wholesalers bringing you real deals that you have 100% financing and can move faster than investors routing paperwork through a brokerage, and ask to be put on the priority list. Speed to close is a negotiating asset with wholesalers in a way price often is not.
The broader point: when you move up in price, you trade a marketing problem for a balance sheet problem. Solve the balance sheet before you buy the bigger house.
Running Lean: The Two-Partner Structure Behind 10-12 Exits
DK Concepts is projecting $5.5 to $6 million gross with zero employees. The structure is two partners and two general contractors.
The split is roughly 70/30 by function, not by authority. Jason takes 70% of the real estate side: market research, city and permit work, deal sourcing, lender relationships, raising capital. Quan takes 70% of construction: managing the build, paying contractors, and design. Decision-making stays 50/50 on everything, including design and who they work with.
The tech stack is deliberately thin. No CRM — at 10 to 12 deals a year, Jason pulls up the MLS and Privy to comp and that covers it. No QuickBooks either; Quan tracks every expense on a spreadsheet, reviewed weekly, with formal profit reviews happening before purchase and after sale. As Quan points out, escrow and title costs are non-negotiable anyway, so the only real levers are construction materials and the contractor. No overhead, by design.
Two honest weaknesses come out of running this lean. The first is that Quan does not want to keep coding every expense by hand, and a VA cannot easily take it over — the line item shows a number but not which material or which house it belongs to. The second is more serious: asked who could step in if something happened to either partner, Jason’s answer was “no one.” A vacation is covered. A real absence is not.
Both partners name the same first hire: a project manager on the construction side. That is the hire that buys back the capacity to run six to eight projects instead of five.
Frequently asked questions
What profit margin should a flipper expect on an entry-level house versus a $2M home?
In Jason Nguyen’s Orange County operation, entry-level flips have been returning $50,000 to $80,000 per deal, roughly 5% of ARV. Premium projects around $2 million ARV in Huntington Beach and Costa Mesa are penciling at 8% to 10%, sometimes more, or $100,000 to $170,000 per deal on paper.
Those figures are specific to his market and his sourcing. The transferable principle is that margin tends to widen where fewer investors are bidding, and that the percentage matters more than the dollar amount because it determines how much error you can absorb.
Can you still find profitable flips on the MLS, or do you need direct-to-seller marketing?
MLS deals still work if your target margin is realistic. Jason’s view is that investors dismiss MLS listings because they are holding out for 12% to 13% of ARV, while he underwrites to 6% to 10% on properties in areas he knows well and accepts a lower but more predictable number.
The requirement is deep knowledge of a narrow geography. He can look at a zip code and a price point and know whether that listing will draw competition, which is what lets him write offers only where he has a real chance.
How many offers does it take to get one flip under contract?
For DK Concepts, roughly five selective offers produce one to two accepted contracts. Jason does not blanket-offer; he picks about five properties over a weekend based on where he expects less competition.
The offers that miss are typically lost to owner-occupants paying retail or to rental investors underwriting future appreciation rather than current profit. Those buyers can outbid a flipper without doing anything irrational, which is why raising the offer is not the fix.
Do you need direct-to-seller lead generation if you flip higher-priced homes?
Not necessarily. Jason’s assumption is that entry-level flipping requires less capital but demands a direct-to-seller operation to find slam-dunk deals, while higher price points have so much less competition that the deals are findable on the MLS without building that machine.
DK Concepts runs no direct-to-seller marketing today and does not have a deal flow problem. Whether that holds depends on your market’s depth at the price band you are targeting.
What does a lender cap mean for how many flips you can run at once?
A lender cap is a ceiling on your total outstanding balance with that lender, and it directly limits concurrent projects. Jason cites a Kiavi cap around $8 million, which at $2 million per project constrains how many premium flips can run simultaneously regardless of how many deals he could find.
Combined with manpower, that puts his current comfortable capacity at five projects, six at most. Any growth plan above that has to solve for either a higher cap, additional lenders, or more of your own cash in the stack.
The bottom line
If you are considering moving up the price band, size your cash reserve for the worst concurrent outcome before you write the first offer — that, not deal flow, is what will stop you. Then narrow to one or two pockets, find a contractor whose finish work matches the buyer at that price, and bring in a local listing agent in that specific micro-market before you buy rather than after.
