Read up on their website yesterday. They also charge a 5.5 percent commission. They are looking for subdivision product that are easy flips. Nothing before 1960.
An example in Goodyear that's currently on the market. They bought a 1,600 sf house built in 2004 for appx $136k per the tax records. The seller paid a 5.5 percent commission. Net was $136,000 x 0.945 = $128,520. Per the listing and the pictures, they did new exterior and exterior paint, nice HGTV-look tile in the kitchen and baths, and a new vanity in the hall bath. Laminate in the kitchen but a tile surround. My guess is they spent $10-$12k per the pictures.
The house is listed for $165k. That's about $10k over the competition, which is not as nice. The neighborhood appeals to first time buyers, with a lot of FHA loans. It will be a tough appraisal and they would have to give concessions. I don't see how they would make any money off this deal.
Update: They actually bought this house off the MLS and paid $136,059. It was listed for $148k in March, they closed in mid April. Took them around 45 days to turn it. Some of the work was done, so I think they spent less than $10k. The only reason I can think they did that was to get their feet wet with flips and to have some product inventory. Or maybe because they are tech start-up investors, they are used to losing money at first. Because they are going to lose money on this one.