Would You Take on This Flip? Or Too Much Work?
Realtor · Phoenix, AZ · Member since 2025 · 57 posts · 21 votes
Would You Take on This Flip? Or Too Much Work?
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Peter MckernanBusiness Member
Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votesSelling fees (estimate), $30,000, and holding costs? How quickly can you get the work done? I would project, 6 months, so if there are holding costs $2,270 a month (not including utilities), with utilities in about $2750.00. $2750x6 months= $16,500.. Points for the loan 1-2 points, so now you are in $3,413 roughly.
Buy: $284,900
Rehab: $115,000
Holding: $16,500
Points: $3,413
Selling fee: $30,000
Insurance hold: $2,000-$2,500 (maybe get back $1,000-$1500 if you close quick)
Other title/escrow purchase: $2,500
ARV: $500,000
Profit: $46,587 (9.25% approx)
I would do the deal, especially if you get that gap for rehab closed 3-4 months and tighten up the rehab costs too ($100,000)
The McKernan Group4.957 Reviews
8 Replies
- 1yPeter MckernanBusiness MemberResidential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
Selling fees (estimate), $30,000, and holding costs? How quickly can you get the work done? I would project, 6 months, so if there are holding costs $2,270 a month (not including utilities), with utilities in about $2750.00. $2750x6 months= $16,500.. Points for the loan 1-2 points, so now you are in $3,413 roughly.
Buy: $284,900
Rehab: $115,000
Holding: $16,500
Points: $3,413
Selling fee: $30,000
Insurance hold: $2,000-$2,500 (maybe get back $1,000-$1500 if you close quick)
Other title/escrow purchase: $2,500
ARV: $500,000
Profit: $46,587 (9.25% approx)
I would do the deal, especially if you get that gap for rehab closed 3-4 months and tighten up the rehab costs too ($100,000)
The McKernan Group4.957 Reviews - Realtor · Phoenix, AZ · Member since 2025 · 57 posts · 21 votes1y
Quote from @Peter Mckernan:
Selling fees (estimate), $30,000, and holding costs? How quickly can you get the work done? I would project, 6 months, so if there are holding costs $2,270 a month (not including utilities), with utilities in about $2750.00. $2750x6 months= $16,500.. Points for the loan 1-2 points, so now you are in $3,413 roughly.
Buy: $284,900
Rehab: $115,000
Holding: $16,500
Points: $3,413
Selling fee: $30,000
Insurance hold: $2,000-$2,500 (maybe get back $1,000-$1500 if you close quick)
Other title/escrow purchase: $2,500
ARV: $500,000
Profit: $46,587 (9.25% approx)
I would do the deal, especially if you get that gap for rehab closed 3-4 months and tighten up the rehab costs too ($100,000)
Appreciate the breakdown! The numbers definitely work if the rehab stays within $100K–$115K and the timeline is 6 months, but with a full gut reno, I want to be realistic about potential delays. If this stretches to 9–12 months, holding costs could climb fast.
I like your point about tightening the rehab costs, I think there’s room to bring it closer to $100K with the right contractor and materials. The big unknown is how deep the electrical and plumbing work will go.
Also, with the attached 1/1 unit, I’m debating whether this could work as a long-term hold instead of a straight flip. Rents in the area are strong, do you think it makes sense as a rental, or would you go all-in on the flip?
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1y
Quote from @Stepan Hedz:
Quote from @Peter Mckernan:
Selling fees (estimate), $30,000, and holding costs? How quickly can you get the work done? I would project, 6 months, so if there are holding costs $2,270 a month (not including utilities), with utilities in about $2750.00. $2750x6 months= $16,500.. Points for the loan 1-2 points, so now you are in $3,413 roughly.
Buy: $284,900
Rehab: $115,000
Holding: $16,500
Points: $3,413
Selling fee: $30,000
Insurance hold: $2,000-$2,500 (maybe get back $1,000-$1500 if you close quick)
Other title/escrow purchase: $2,500
ARV: $500,000
Profit: $46,587 (9.25% approx)
I would do the deal, especially if you get that gap for rehab closed 3-4 months and tighten up the rehab costs too ($100,000)
Appreciate the breakdown! The numbers definitely work if the rehab stays within $100K–$115K and the timeline is 6 months, but with a full gut reno, I want to be realistic about potential delays. If this stretches to 9–12 months, holding costs could climb fast.
I like your point about tightening the rehab costs, I think there’s room to bring it closer to $100K with the right contractor and materials. The big unknown is how deep the electrical and plumbing work will go.
Also, with the attached 1/1 unit, I’m debating whether this could work as a long-term hold instead of a straight flip. Rents in the area are strong, do you think it makes sense as a rental, or would you go all-in on the flip?
have you gotten quotes recently? A full gut and roof HVAC windows etc for 100k seems very low. Especially if you also have to do kitchen and baths.
7e investments53 Reviews - Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes1y
Agree with Chris, get 2-3 bids. With a project this size you want to 100% verify before diving in. The good thing is you won't have a bunch of surprises since you are already assuming most of the mechanicals need done. If it checks out then the numbers seem good. I would also make sure you have a good amount set aside if something hits the fan.
- Realtor · Phoenix, AZ · Member since 2025 · 57 posts · 21 votes1y
Quote from @Caleb Brown:
Agree with Chris, get 2-3 bids. With a project this size you want to 100% verify before diving in. The good thing is you won't have a bunch of surprises since you are already assuming most of the mechanicals need done. If it checks out then the numbers seem good. I would also make sure you have a good amount set aside if something hits the fan.
Good call, getting multiple bids is definitely the plan. With a full gut like this, I’d rather overestimate than get caught off guard mid-project. I agree that the upside here is knowing most of the mechanicals need to be redone upfront, so there should be fewer ‘surprises’ along the way.
Setting aside a solid contingency fund is a must—do you have a rule of thumb for that? I’ve heard anywhere from 10-20% of the rehab budget, but curious how you approach it, especially for bigger projects.
- Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes1y
Quote from @Stepan Hedz:
Quote from @Caleb Brown:
Agree with Chris, get 2-3 bids. With a project this size you want to 100% verify before diving in. The good thing is you won't have a bunch of surprises since you are already assuming most of the mechanicals need done. If it checks out then the numbers seem good. I would also make sure you have a good amount set aside if something hits the fan.
Good call, getting multiple bids is definitely the plan. With a full gut like this, I’d rather overestimate than get caught off guard mid-project. I agree that the upside here is knowing most of the mechanicals need to be redone upfront, so there should be fewer ‘surprises’ along the way.
Setting aside a solid contingency fund is a must—do you have a rule of thumb for that? I’ve heard anywhere from 10-20% of the rehab budget, but curious how you approach it, especially for bigger projects.
20% of a 115K rehab is 23K. That should be enough. I don't see it going a ton over budget with the bid size and what's estimated. It can be ate up quick so the more the merrier.
- Realtor · Phoenix AZ, USA · Member since 2023 · 209 posts · 81 votes1y
Numbers make sense but what are the comps showing? Make sure there is a good number of comps with that similar layout so you know you can sell the property.
Looks to be enough room to make money but just be sure you're very confident in the comps in the area the property is in.
Wholesaling works different in different cities, people will come on saying get quotes and all this but in Phoenix you have to move extremely quick if it's a good deal. So knowing your numbers before looking at properties is huge or bring your contractor with you when you look at properties so as to not waste any time! - Realtor · Phoenix, AZ · Member since 2025 · 57 posts · 21 votes1y
Quote from @Jackson Harris:
Numbers make sense but what are the comps showing? Make sure there is a good number of comps with that similar layout so you know you can sell the property.
Looks to be enough room to make money but just be sure you're very confident in the comps in the area the property is in.
Wholesaling works different in different cities, people will come on saying get quotes and all this but in Phoenix you have to move extremely quick if it's a good deal. So knowing your numbers before looking at properties is huge or bring your contractor with you when you look at properties so as to not waste any time!Great advice—I completely agree. I’ve been digging into the comps to make sure there’s solid data on similar layouts, especially since unique floor plans can be tougher to price accurately. So far, I’m seeing a mix of fully updated and dated properties, but I’ll definitely double-check before making a move.
And you’re spot on about Phoenix moving fast. I’ve seen deals get locked up in hours, so having my numbers ready ahead of time is key.
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