Minneapolis, MN · Member since 2016 · 3 posts · 2 votes
Hello all!
I have been listening to the BiggerPockets podcast, and decided to venture into flipping houses. I bought my first house a few years ago for a steal. It was a foreclosure and needed a little bit of work, but after doing some projects, I realized I was thinking, "man, if I could do this all day I would!" I am not quitting my job, but I am looking to buy my first property when I find something that fits my target range and ability.
The biggest thing I am struggling with is ensuring I have calculated all the numbers accurately (or close to). I don't want very many surprises. Has anyone posted a budget sheet they use?
Hi Liz...welcome to BP. On here at BP under "tools" you will find what you are looking for in a calculator. You can try it for free, before you decide to an upgrade in membership that will give you unlimited calculations. It's a great resource. Happy educating and investing!
Hi Liz...welcome to BP. On here at BP under "tools" you will find what you are looking for in a calculator. You can try it for free, before you decide to an upgrade in membership that will give you unlimited calculations. It's a great resource. Happy educating and investing!
Welcome @Liz Hansen. I don't think a budget sheet will help much, IMO, simply because it all depends on the property and its condition. Few years ago was amazing time to buy, so that's great that you did!
Welcome @Liz Hansen. Yes, the calculators may help but I agree with @Account Closed...it will depend very much on the condition. Go through every aspect of the home and include all of repair costs. Ideally, the cost of the home plus all of the rehab costs should equal 70 percent of the after repair value. As Pavel mentioned, there were a lot of those deals a few years ago. Right now, it is very difficult to find a deal and make the numbers work. I don't mean to be a discouragement, just realize that you will need to look at a lot of deals before you will find one where the numbers work.
Avoid these mistakes...
1. Under estimate repair costs.
2. Under estimate the time it will take to do the rehab
3. Over estimate the after repair value.
Or, you can be like me on my last rehab and miss on all 3! I broke even on the deal but it's discouraging to put in all that work and make no money.
@Liz Hansen Budget sheets are nice to have but, if you are going to do this seriously, you actually need to pick up the phone and call contractors and subcontractors and get numbers directly from them. Hold a "walk-thru" at the property to get budget numbers before you purchase. Once you have been through it a time or two, you'll develop your own budget sheet that you can trust.