Is this a good deal?
I live in fort worth Texas.
I'm in the process of making my first deal I need help.
I have about $80,000 in cash for the purchase
Private or Hard money lending - $36000 to complete the purchase
I want to do short-term rentals like Airbnb or HomeAway
Selling 28k below market value
Fort Worth TX area
House needs some TCL to flip
@Jimmy Jean-Louis I'd need some more information for some input... does TCL include foundation, roof, or other majore rehab work? Where did you get the "28k below market value"? I live in a much nicer area right around there and the house was 200k... I'm not quite sure 116k for a 3/2 from 1940 is warranted. If the touch ups are just cosmetic you could make the numbers work, but after taxes (especially if it's a flip) if you're not going to do a 1031 it could just not be worth the effort. The cash you're putting up is egregious as well, 36k is 20% for a 180k all-in cost.
Also, IMO... idk who would want to have a turnkey out there towards Lake Worth. If I'm booking an Airbnb I'm going to stay closer to downtown, 7th street area, or the stockyards... but hey if that's the strategy you'd like to pursue then it could work out fine with some effort.
You are right, the numbers did not add up. I get properties deals from a wholesaler which is below market value. I will try to find another property in the Arlington area.
@Dylan Hargrove Hi Dylan, I saw you mentioned tax. I've always wonder how much tax should I estimate to subtract after a flip ? is 25% close enough ? Thank you
@Hao Dinh Hey there Hao. When it comes to estimating taxes it obviously depends on the state and your tax bracket primarily since flips are treated as an exchanging of inventories - like selling a newspaper almost - so for that reason its hard to give a specific number... In general I would say 28-25% is a comfortable estimate, and if it ends up costing you less then you can simply think of it as a pleasant surprise, and perhaps re-baseline your estimate using the local actual numbers you've accumulated! Hope that helps.