You should start at ARV then subtract 60-70% depending on where it's at in Springfield. Then subtract repairs, realtor cost, and closing cost and you should be able to sell fast give me a call if you need any help maybe this is something our team can buy 3058511979
$60k purchase and $40k rehab on a $150k ARV property does not leave the investor with $50k profit. What about closing costs on both the purchase and the sale? Holding costs during the rehab? Realtor/broker commissions to sell? That "$50k in profit" quickly gets diminished when you analyze a deal and run the numbers properly.
@Brian Garrett is on point. I also question how you got to the $40k rehab figure. Was that based on an "average" per square foot or did a GC actually look at the property and provide a quote? If so, how deep did he go?
Originally posted by @Louis Siano :
@Darren Lenick that IS a price per square foot cost that I guesstimated! Do you recommend getting a contractors opinion even though I’m trying to close this deal quickly and trying to keep my margin as high as possible?
Using a blanket cost/sf is not a good way to come up with a rehab estimate/budget. Even guys who have been doing this for decades with hundreds of houses under their belt would probably be hesitant to just use a $/sf. You need accurate numbers and scope of work.
@Louis Siano Investor wants 25% return at least. Sometimes, we, as investors hit it bigger than that, but 20-30% is what it takes. I'm in and out of properties daily. Do alot of rehab cost analysis. 99.9% of the rehab costs that wholesalers give is too low. I always want to think it is not due to dishonesty, it is more of an issue that they are sales people and not construction people. BUT, depending on a wholesaler's rehab numbers will usually get you into trouble.
@Louis Siano yes we buy as well give me a call whenever 3058511979