Read J Scott's book on flipping - am I thinking along the right lines now with this property?
Home I'm looking at has been on the market for 4 months now. Owners are asking $110,000 for a 3/2.5 in a Minneapolis suburb.
I've been looking at comps and here's what I'm finding:
2 similar homes (1 a few doors down on the same street, 1 on a street 1 block down) of similar size (within 200 sq ft, same br/ba) have sold within the last 6 months for 159 and 163k.
2 similar homes are currently for sale on the same street for 159 and 160.
I'm not sure if this is enough comps to begin making an appraisal? Looking through the pictures, these 4 homes all look similar to the one for $110,000, but are in better condition, albeit with cheap appliances/finishes.
So, based off of this info, assuming I would put in nice (but appropriate for the area) finishes on this house, would it be a reasonable assumption to assume I could list for $160 and close for $155,000?
This home has been on the market for 4 months now. From what I can see in the pictures, it needs some landscaping work to create some curbside appeal (some bushes and dead grass areas fixed), the basement needs to be finished (completely dry-walled, needs paint/flooring/trim), upstairs needs paint/carpet (mostly good condition, just old/dirty/strange colors). Kitchen could probably use some sprucing up - repainting cabinets, new hardware, new appliances.
I saw a similar post on here where someone did a similar amount of work for ~15k, though her prices were competitive. I'm going to bump my estimate up to 25k (don't pay too much attention to this, I'm just using this for hypotheticals, I still have my J Scott book on estimating costs to read).
Since the home has been sitting for 4 months now, let's say I throw in an offer of $78,000, they counter with $85,000, we meet at $82,000.
With an eye toward's Scott's section on holding costs, I've put in a (what I think is) conservative estimate of 25k in holding costs - this is based on me paying half the closing costs when buying and all of them when selling (very normal from what I've seen lately), holding the home for 6 months, insurance, taxes, mortgage, utilities, 6% sales commission, etc etc. I suspect/hope this is very conservative and would be closer to 20, but I'll leave it at 25k.
With that and my rehab fees, hypothetically me grabbing this property at 82k, my numbers indicate this would net me about 20k in profit sans taxes.
I asked for realistic evaluations of my thought process previously, was told to read Scott's book, and here I am once again seeking honest opinions on what I'm thinking after having read the book. I realize it's a leap to think I can get the property for x price, or not having accurate rehab costs, but those are things I would really look into more closely during a contingency period.
I'm trying to work past this whole 'paralysis by analysis' syndrome I'm currently in, but I'm having a hard time trusting myself on these numbers when the house has been sitting for months and much savvier investors than me haven't scooped it up.
Thanks for any opinions