Working on First Flip ANY ADVISE?

3 Replies

Hi i’m working on my 1st Flip in Belleville Nj. The asking price is $155,000 and the wholesaler who is also an agent says the ARV is $290. After running comps I noticed the ARV is between $240,000 and $250,000. I’ve done research on the area to see if there is a market of buyers in general which there is because there is 4 months of inventory supply and the
style, br/ba, year built all within a mile. I plan on offering $140,000. Once accepted at his price I will be in at $140l, selling for at least $240,000 and putting in $50k including rehab cost, purchase/selling cost and 6 months of holding cost I like being conservative. I’ve received buds from 2 contractors and picked the best of the two based on references and fair prices, and have a realtor confirming the ARV with me over the next 24 hrs
I already have money coming up with at least 80% and 20% i’m committing to the deal. And raising private money for closing cost and 6 months reserves for holding cost.

Are there anythings I should be looking out for prior to purchasing, working with contractors, selling/marketing, or anything-else?

Have you done your due diligence with the city for liens and fines?  I always check with the building department and tax man before making any deals.  Many times these are difficult to find but if you have any title persons in your arsenal it is worth the effort to have them run a quick check.  Sounds like a good deal on the surface.  Best of luck.

Try to make sure you have as accurate number as possible for your rehab costs...then ad 10%. Don't forget about the little things like hings, door knobs, light fixtures, plumbing fixtures, switches and outlets, cabinet handles and knobs, permits, etc. Sounds like you have a good handle on it. 

Best of luck!

I agree with making sure there is clear title, watch out for the wholesaler asking for a non refundable deposit and be comfortable with your costs. After that close on the house and get going on it!

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