Looking for insight:
Would you do this deal:
Purchase price: 75k
Hard money 9% +3 points
Up front Out of pocket cost: 21k
Holding cost (6months): 11k
Net profit: 17k
@Ray Realdine . Need more info. Have you don't flips before? What's in that scope of work? Do you have comps to support that ARV? Average days on market?
Thanks for your response!
No flips yet, but 2 rentals that both needed rehab work.
I have 4 comps that sold in the last 90 days that range between 185 - 240.
The house needs a ton of work. New kitchen, new baths, electrical work, paint, flooring, windows...the list goes on.
I don't like the sound of those comps. You really need to dig in on those and make proper adjustments. That's a wide range. 185 is not going to be good if that is an accurate comp. 240 would be awesome.
Not to mention that your list sounds like I am taking the over on 75K.
Personally I think you are cutting it close and I would pass. With the comps being such a wide range it really could go either way. If this appraises for only 200 you will be at a loss. What would be your backup plan if the house only appraised for 190k? I hate to see people lose money on their first flip. Always, Always have a backup plan. And I recommend having a buffer of 10% above your repair costs for things that come up and believe me things will. There is no way to know until you start tearing into things.