Analyzing A Flip Deal

5 Replies

Hey guys just want to make sure I'm analyzing this correctly. I'm looking at a home in long island New York for a flip. The home was built in the late 1920's. It's a 3 bed 1.5 bath. It's a foreclosure that just hit the market for 275k. ARV is approximately 415,000k.Taxes are $14,000 annually. I'm taking money from my heloc for a down payment and to pay the holding costs and the rehab. Let me know if I'm missing anything or if anything needs correction or clarification. I know this isnt a good deal, but I just want to make sure my analysis is proper. Thank you.

BUYING COSTS

DOWN PAYMENT 20% = $55,000

REHAB $85,000

CLOSING COSTS $15,000

HOLDING COSTS

MORTGAGE W/TAXES AND INSURANCE $2,540 per month

HELOC $800 per month @5% interest min. payment

Utilities $500 per month 

SELLING COSTS 

Commission - @ 6% $24,000

All that have followed so far assuming I held onto this from start to finish for 8 months and sold it at ARV of $415k. My holding costs would be appx. $31,000 including utilities, monthly insurance, monthly mortgage, and heloc payments interest only. Like I said earlier i know this deal wont work, but am I missing anything in terms of analyzing. Thanks.

-Sean

Seems like you have everything covered. A older house such as this may have some unforeseen repairs once you dig in. Would certainly keep a contingency. 

Also would factor in a lower sales price in case you need to sell quickly or market changes. Just as a precaution. 


Best of luck in all your endeavors.