Buy / Sell costs for Flip & Hold in Texas

6 Replies

Hello everybody

I am having a hard time making math work with DFW flips, and I understand that ship of easy money has sailed, and that wholesalers + hard money eat a lot of profits.

Particular problem is with buying / selling costs.

What would approximate math look like on a 150/180K PP, with 250-280 ARV with 40-50K in rehab. - this is what my analysis looks like

Please let me know if my math is way off in terms of buying / selling costs & hard money financing.

Lets assume that hard money is 70% ARV - 12% interest only - 6 mo min with 2-3 points

Thank you!

@Andrew Grushevsky Without being able to see what is in some of those buckets, it all looks good to me. The thing I look for is to make profit of 8%+ compared to ARV with a minimum of $18k so you are a little light there but everything looks like a good deal. If this is your first, I would make sure to have someone check your renovation budget if you haven't had quotes taken on it. Just have an agent or investor friend walk the property without telling them your budget to see what they come up with.

I didn't check your comps for your ARV. I would advise to not show property addresses until you have it under contract but I don't know anyone who has been burned on that. I like to think we are all here to make money but to also help each other out.

Good luck and I hope it is a winner for you!!!

Edit: Just saw the lot sq ft. That is a big piece of property for Arlington. Great job on the find. I also see you are in LA. Let me know if there is anything I can do to help. I am a full-time investor in the same county.

The numbers look correct but I agree with @Ryan Blake, 18k is a little light and can go right out the window if there are any major repairs needed that are not discovered until you have taken ownership and begun the rehab (foundation, plumbing, electrical, roof, etc.). You should be able to catch most issues in the inspection phase but personally... I like a safety net. My safety number is 30K. Remember, your money is made on the buy side so don't be afraid to lowball if it means keeping your pocket book safe. The worse thing that can happen is the seller says no and you move on to the next one. To me the potential risk out weighs a seller with hurt feelings from a lowball offer.

@Ryan Blake I basically plug in all my known numbers, planned sales price, holding cost, and closing cost. Then I adjust my offer price until I get it to AT LEAST 30k in profit. My risk tolerance won’t allow me to move forward on an offer unless that’s what I’m making on paper. That strategy may not work for everyone but I don’t want to loose money and I definitely don’t be want to loose any of my investors/partners money.