Do you like my FLIP numbers?

14 Replies

Hi everyone,
I am working on a flip, let me know what you think of the numbers.  In addition, am I missing anything?

Flip Analysis
ARV $ 110,000.00
Purchase Price $ (55,000.00)


Repairs
Kitchen $ (2,500.00)
Carpet $ (2,000.00)
Bathroom 1 $ (2,500.00)
Bathroom 2 $ -
Paint $ (1,000.00)
First Floor Laminate $ (3,000.00)
$ 10,000.00
 
Cash Requires  
Repairs $ (10,000.00)
Downpayment $ (11,000.00)
Closing Cost $ (5,500.00)
$ (26,500.00)



Holding x 4 months $ (3,400.00)

Sale Price

 $ 110,000.00
Purchase + Repair $ (68,400.00)
Realtor $ (6,600.00)
$ (75,000.00)


Not Including Holding Profit $ 35,000.00
Including 4 month Hold $ 31,600.00 

Looks pretty good. Only $10k in repairs, though? How many square feet is the house and current condition? Tough to find deals at 50% re-sale value that only need $10k in repairs.

@Lucas Machado
It’s 1100 sq ft, 2 br 1 bath.

Overall condition seems good, it’s a condo so exterior is hoa responsibility. I will have to make sure windows are good and hvac. Its a short sale.

@Michael P. just some observations, however without knowing ANYTHING about the actual house, this is all just random thoughts.

No exterior work? Landscaping, mulch, tree removal, siding, windows, roof?

Are there any mechanical, electrical, plumbing things that need work? I have never had a house that didn't need some form of MEP scope. Things also pop up during the sale inspection that need fixing.

Paint, seems light. I spend around $1000 for materials alone, paint, primer, rollers, brushes, covers, sand paper, etc... If you are doing the work, this is about right (not knowing the full scope I am just guessing here). If paying, this seems light. Also only assuming interior work.

What does the bathroom work entail? A full gut, paying a contractor I think you might be light, however I have never paid for a bathroom to be done by a GC.

$2500 is very light for a kitchen. I assume no appliances or keeping existing? Keeping or replacing cabinets and counters? If you are renovating, and pulling a permit they will most likely require you to redo the wiring for the needed dedicated circuits (fridge, dishwasher, microwave/hood, etc) and to meet current codes (locations of outlets, GFCI etc). My most basic kitchen where I needed to do this was around $750 for the electricians to rough it in. I did the demo for them, and the plates, install appliances, etc.

I also did math based on your numbers and didn't get the same profit you did:

$110,000

- $55,000 (purchase)

- $10,000 (renovations)

- $5,500 (closing costs)

- $3,400 (holding costs)

- $6,600 (realtor fees)

$29,500 profit.

@Brian Pulaski
No exterior work but I did not include appliances so that’s something to add. Regarding kitchen I know a company for a 10x10 kitchen with granite counter 1900 plus 20 a cabinet to install.

I will have to re-evaluate the math but still very profitable from overall assessment right?

@Michael P. did you take a look at the $1900 10x10 kitchen (they usually show you exactly what the deal includes)? I have seen those ads. The reason I ask, is because if the layout they are selling needs to be changed, the price can change fairly quickly. Next thing you know the $1900 kitchen (plus tax most likely, and then install cabinets for $20/EA, will be a few hundred dollars) is over $3000. Add in at least $1000 in appliances, the electrical work that I imagine will be needed, and some plumbing to hook things up, faucet, drain/trap, disposal etc... I can't imagine getting a kitchen done, to code, with new appliances, cabinets and granite for less than $5000, unless you get some scorching deals.

It seems like it has great potential, I would go after a $20-25,000 potential profit deal with a cheap buy in price.

@Brian Pulaski
After recalculating, with 1500 for appliances.

I am at 27 not including holding for 4 months.
With 4 month holding, 23,6k.

@Michael P. still not a bad deal, assuming you feel confident you are covered for the work it needs.

One thing to think about in regards to a $110K sale price. It will most likely be selling to an FHA buyer, which "can" complicate the sale a little. Every FHA deal I have seen/dealt with asks for give backs at closing (up to a certain percent is allowed). FHA inspections are more involved and certain items need to be done with no negotiations from you. Also an FHA appraisal, if it comes in lower than your hopeful sale price, will stick with the property for any other FHA buyer, for 6 months.

Not that these are issues, just items to think about when analyzing the deal.

@Brian Pulaski

Thats good to consider, basically I provide seller assist, I could give 3 to help, i am still at 20 for profit. But I am being very conservative on my ARV, because a recent comp from August sold for 120. But if I close in December and put it for sale after finished in the winter months, I might take a minor hit on the sale price. That is why I am using 110.

@Michael P. I would still go after a deal like that (low cost point) to make $20,000... hopefully it works out for you!

what are you doing to the kitchen for $2500? I did a really basic one in my house that has Lowes white cabnits, famica coutertops, tile floor in kitchen, subway tile backsplash, new appliances, knobs and pulls, and i installed all of it myself. it cost about $7000. cabnits where $2200 and i got 30% off 

@Clancy Catelli
That’s fair priced I’m sure but 10x10 kitchen is 2k plus if you read further I added 1500 for appliances

We are doing a similar project on a 2/2 condo our budget was 10k, but we are looking around 8500 now. The complex doesn't allow FHA financing so our buyer pool will be more Conv. VA or Cash and hopefully won't need much in closing costs help. I think numbers look solid. However our resale will be around 95k still a nice profit

I am now considering to just rent it and make the same profit in over 5 years but continue holding. A cash out refi will reduce my noi but I will continue moving forward to the next deal.

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