I was thinking of starting to flip houses and was curious of which to do first.
should I secure a financing route before I start looking and making offers or the other way around?
I am in the NE Metro Atlanta area.
Getting hard money financing is pretty easy. The hard part is finding the right deal, doing the rehab without going overboard and staying on budget, and reselling it in a timely manner. If you are inexperienced, you will want a lot of guidance on doing your first few flips. You can find tons of experienced guys and ladies on here to help you.
Thanks. Is there some guidelines to financing I should consider on my numbers? To see if they work?
For deals around $250k ARV and under, your actual purchase price should come in around 50% of your ARV unless your doing a tear down or very deep rehab. Most flippers are looking for a 30% margin, but that's tough to find in ATL these days.
Good luck with it.
how do you calculate a 30%margin? I am lookin at one purchase for 115k, put in 10k in upgrades and sell for 148k.
I'm new too and have no real experience, but I've been reading about it a lot lately.
You've got to start with your after repair value (ARV). Do the comps, and come up with a conservative estimate of the the final selling price.
Then determine your repair costs. Best to hire a contractor. Again, be conservative.
Then determine your holding costs, including costs related to buying and selling.
Then determine your profit.
Then come up with your maximum offer.
Hopefully this helps. There is a lot more depth to all of this that you can read about. If anyone with experience thinks I'm off the mark, please jump in. I'm still learning myself.
If your ARV is $160k, 30% of that is $48k. 160 X 30% = 48.
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