HOW DO YOU KNOW???

3 Replies

how do you know if you should flip in a neighborhood? I see a property for 57k in a hip area the property was assessed for 124k in its current state. ARV could be 250k+ Its been on the market for 54days and has a ton of comps around it. The good thing about this property is that if it does not sell quick enough i could easliy rent it. It is a foreclosure. Now my concern is that its listed as a one bed one bath. Many houses list and many houses sell. What else could i do to determine if this is a good investment.

First I recommend running the property thought the flipping calculator here on BP. Then I would suggest looking for upside potentials e.g. Can you add an additional bedroom in the basement or attic(assuming it has either).

If your looking for further confidence I would try to partner and split profits with an experienced investor in your market who can help you vet the deals until you become more confident. 

Best of luck to you!  

You'll have to decide whether to good investment FOR YOU. We can only give you the knowledge to help you get there. Contact a title company and see what the bed and bath count and square footage is on title. Then run your comps again of similar size houses and find a true ARV . Have you walked the house yet? Walk it with a contractor and find out how much it's going to cost to remodel. And rerun your numbers starting with ARV and start subtracting rehab costs, selling costs, and your profit and find out what the most you can pay for it is. if you want to keep it as a rental find out what your monthly payments will be, as well as market rents are in the area and see if it makes sense. Good luck.

Hey Shaniqua,

Do you have a good realtor to advise you? I always like to leverage local knowledge before making a decision. If you don't, go on Zillow and look up the top selling realtors in that area. Pick the top 5 and call them. Ask them for comps. Usually 2 to 3 will call you back. If they all come back with the same info, then you have some good data to go by. And some good follow-ups to possibly sell it for you and become a long-term partner in that area.

Hope that helps.

Rafael

Rafael Norat, RN Business Management | [email protected] | 908‑419‑3665

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you