Rehabbing in Atlanta

3 Replies

I am searching for an article reporting on the average gross profit a Real Estate Investor should expect to receive if he/she were to rehab a single family home in the metro Atlanta area. I would like to use this article as a reference. I found an article on the AJC stating that Real Estate Investors who rehabbed properties earned on average $50K gross profit in 2014 (http://www.ajc.com/weblogs/biz-beat/2014/jun/20/report-metro-atlanta-house-flippers-lag-nation-pro/). This seems rather high. I am hoping someone with great insight in the Atlanta market can lead me to the right article to reference or provide good insight on what should be expected. Thanks!

Medium peachlifeBriana Johnson, Peach Life Properties | [email protected] | 504‑913‑9484

@Briana Johnson  I've not seen this article.  I'm not sure it exists.  Results vary wildly based upon experience, timing, and strategy.  

However, based upon my experience I think there's a scale of results and expectations by experienced investors.  Here's what I expect.  Time/complexity of the deal is as much a consideration as cash outlay.

Minor Cosmetic Flip - No layout changes, just paint, carpet, swap fixtures.  Total rehab cost 20 - $30k.  I expect a $20k margin and a very fast, easy project.

Moderate Cosmetic and Layout Modification Flip - Minor layout changes including addition of bath, laundry, foundation issue, mold issue, OR opening up Den/Kitchen.  $30 - $60k rehab cost.  I would expect $30k - $40k for this type of project.

Major Rehab -- Interior gut or moderate addition, pop top.  $120k rehab expense.  $80 - $100k profit.

New Build -- Either starting with dirt or leveraging existing foundation, new build.  $100k+ profit unless a subdivision.

@Abhi Golhar or @Todd Whiddon can weigh in and provide their perspective.  

@Rick Baggenstoss

 Thank you for your insight. This is very helpful. I appreciate the break down in the level of rehab that would be completed and the expected profit related to that project. 

Medium peachlifeBriana Johnson, Peach Life Properties | [email protected] | 504‑913‑9484

@Briana Johnson -

I primarily play in the major rehab/new construction/subdivision space. The numbers @Rick Baggenstoss mentioned were right on target. 

For major rehabs, net profits can be $80k+,
new construction 100k+, and
subdivisions can be significantly more. 

As speculators, we understand there are many factors that contribute to increased profit expectations and the success of a project. Therefore, I would complete the due diligence that most do incorrectly (or don't do at all), including: 

1. Neighborhood & school analysis
2. Repair costs, and 
3. ARV

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