Newbie Flipper Neeings Help With Analysis (Work Sheet Below)
Hi everyone
I'm doing some pre analysis on some houses and it seems to me things are a bit expensive especially in terms of materials and labor. I'm in the NJ market so that is to be expected.I'm struggling with analysis mainly in trusting my numbers and actually finding numbers that work for me
-I've built in an safety net into my budget but don't know that it's enough
-I've assume some steep borrowing costs for myself being a newbie and not having a high income (5pts upfront and 15% interest lol)
-I'm struggling with picking the right number for a remodel. (I typically chose about $24-$34 per sq ft)
-MOST IMPORTANTLY - trusting comps that I'm pulling. I typically go on RedFin or Zillow but being that I've never done this before, I 'want to compare apples to oranges.
I've driven for dollars and have built a list of some potential addresses but now I need to figure out which one is a deal and which isn't. Should I be seeking to contact these people through the phone to see if they're interested in selling their home to an investor? Should I be sending letters? Should I contact a realtor? or Should I do the analysis first ?
Here is the data copied from excel that I use to do some of my analyses. If any experience flipper can share some knowledge and wisdom on the process, I would truly appreciate it. I can send the actual excel file through email if you want to see my calculations and assumptions.
| Purchase Price | $ 166,083.31 | Year Built | 1910 | ||
| Realtor or Finders Fee | $ - | Lot Sq Footage | 0 | ||
| Total | $ 166,083.31 | Sq Footage | 1684 | ||
| Yearly Tax | $ 10,000.00 | ||||
| Amount to be Borrowed | $ 228,440.32 | Bedrooms | 3 | ||
| Personal Cash Invested | $ 35,216.66 | Bathrooms | 2 | ||
| Pre-Inspections | Lip Stick | $ 18.00 | |||
| GC Quotes | $ 700.00 | Lip Stick Advanced | $ 24.00 | ||
| Lining | $ 700.00 | Standard | $ 28.00 | ||
| Inspection | $ 600.00 | Vandalized | $ 32.00 | ||
| Total | $ 2,000.00 | Big Gut Out | $ 36.00 | ||
| Cost of Money | Remodel Type | Standard | |||
| Points (assuming 5pts) | $ 10,000.00 | ||||
| Broker Fee | $ 2,000.00 | ||||
| 6 months Interest | $ 17,133.02 | ||||
| Lender’s Lawyer | $ 1,300.00 | ||||
| Total | $ 30,433.02 | ||||
| Closing at Purchase | Potentially covered in points payment | ||||
| PurchaseTax | $ 3,321.67 | I assume 2% | |||
| Title Work | $ 1,000.00 | ||||
| Total | $ 4,321.67 | ||||
| Construction Costs | |||||
| GC | $ 47,152.00 | I multiply sq footage of house by preset number | |||
| Materials | $ 10,000.00 | Total Guess | |||
| Misc (Permits, etc) | $ 5,000.00 | Guess | |||
| Appliances | $ 6,000.00 | Guess | |||
| Safety Net | $ 15,000.00 | is this enough or too much? | |||
| Total | $ 83,152.00 | ||||
| Holding Cost | |||||
| 6 month Property Tax | $ 5,000.00 | ||||
| 6 months Utilities | $ 600.00 | I assume $100 per month | |||
| Commercial Insurance | $ 2,500.00 | Is this needed? | |||
| Total | $ 8,100.00 | ||||
| Closing Cost at Sale | |||||
| Tax | $ 500.00 | ||||
| Title | $ 1,100.00 | ||||
| Warranty | $ 500.00 | ||||
| Realtor Fee | $ 19,750.00 | ||||
| Total | $ 21,850.00 | ||||
| Total Costs | $ 315,940.00 | ||||
| ARV | $ 395,000.00 | ||||
| Net Profit before Tax | $ 79,060.00 | ||||
| Net Profit after Tax | $ 51,389.00 | Asumming 35% Capital GainsTax | |||
| Minimum Required Return | 25% | ||||
| Actual Return | 25.0% | ||||