Using Data to Analyze a fix & flip

5 Replies

Couldn't help but notice a large part of being successful in house flipping is analyzing data. However, organizing this data is very time consuming.

What data aggregators are people using to find deals? I can build a spreadsheet myself but plugging everything into it takes a ton of time. Also finding out what has recently been sold, which markets have increased/decreased their time on market, gone up/down in price, and other factors seems like a daunting task manually.

Thanks all!

Brian

@Brian McWethy It's tough when you are starting out.  Rehab cost is probably the most time consuming.  The easy way out is to pay a trusted contractor for their time to go through the house and do a materials and labor bid/estimate on your scope of work.

Personally, I either do that or just ballpark the rehab myself.  I haven't got time to calculate everything out ad nauseum.  I just make sure there is plenty of margin so if I'm low, even by 30%, I'm still fine.  This takes experience, though.

Originally posted by @Larry T.:

@Brian McWethy It's tough when you are starting out.  Rehab cost is probably the most time consuming.  The easy way out is to pay a trusted contractor for their time to go through the house and do a materials and labor bid/estimate on your scope of work.

Personally, I either do that or just ballpark the rehab myself.  I haven't got time to calculate everything out ad nauseum.  I just make sure there is plenty of margin so if I'm low, even by 30%, I'm still fine.  This takes experience, though.

 Thanks for the insight Larry. I'm not the OP but I have a follow up question. For someone who is starting out, paying someone with experience does seem like a good option. It gives you a chance to learn how its done and avoid costly mistakes. That being said, what is the best way to do this? Is it only during the inspection period or before making an offer?

@Patricio P. You don't want to pay someone for every house you look at.  You should have an idea that it might be a deal.  So you go through first.  If you are not worried about the property being scooped up, bring your contractor through first.  Otherwise, make your offer and bring your contractor through while the inspection is happening.

Originally posted by @Larry T.:

@Patricio P. You don't want to pay someone for every house you look at.  You should have an idea that it might be a deal.  So you go through first.  If you are not worried about the property being scooped up, bring your contractor through first.  Otherwise, make your offer and bring your contractor through while the inspection is happening.

Thanks for your response Larry. If you are someone who lacks experience in estimating rehab costs yet you can reasonably predict ARV and calculate the discount you want to buy at, is there a method for doing a rough estimate of rehab costs such as using avg. rehab cost per square foot for your farm? How common is it to get a property under contract and then drastically change the purchase price based on a more thorough analysis of the rehab costs during the due diligence period?

@Patricio P. First, I rarely change my price after bringing through a contractor. In fact, I think I never have. I just changed based on ARV when I did further analysis recently.

For ballparking it, ask these questions of your trusted contractor.   Figure out what a typical house size in your area is.  For me it is 1,500 sqft.  Then ask, how much to paint an entire interior?  How much to remodel a kitchen?  How much for a bath?  Windows?  Roof?  Etc.

You'll develop at least an idea.  Say a total gut of the interior, plus roof, siding, windows is $70K.  Does the house look like it needs half of that?  Ballpark it at $40K to be safe.  You're not likely $30K off.  Maybe $10K off.

Just start doing it.  Your biggest problem will be finding a contractor whom you can trust, and who is reasonably pricing, reliable, and responsive.