Help me a analyze this deal in Baltimore

43 Replies | Baltimore, Maryland

I just purchased my first flip from foreclosure auction. It's in 166× Argonne drive, hillen neighborhood. I bought the property for $70k, I'm expecting a $40k rehab costs. But I'm out of state and scared that my contractor might screw me up. Now I couldn't decide if I sell it as-is to another investor or flip it. I don't know what to expect in my first flip if I decide to flip it 

@Khelifa Ahmed I am local and I am always scared my contractor will rip me off.  Personally I can't imagine doing a rehab log distance. It just seems to me to be too big a risk.  If you can sell it as is and take a profit that is what I would do.

@Khelifa Ahmed - what makes you scared your contractor is going to rip you off? Have you had more than one bid?

I live close enough to your property that I could walk to it. Also, I've had contractors bid on rehabs on properties in the area and for a retail flip I think you will have a tough time getting that done for $40k, unless the home already has central air and a the proper wiring to support it. Not going to say it's impossible though. I would expect a rehab in that area to be closer to $60k, possibly more. Just letting you know so if you get quotes around $60k, they are probably legit. Your ARVs are going to be $165k easy with a few going around $190k on the very high side (those tend to be end units with 1500 sf, 4th bed in finished basement, with at least 2 full baths). 

I've been in your shoes before and have been able to unload deals to other investors, so if you go that route I could give you some names of buyers. When do you close?

@Heath Ryans, ARV is from 165k to 180k, most of the house that was sold for 165k are just well maintained. No renovated house on market on that neighborhood now. There is one for 165k, it's just well maintained

Originally posted by @Khelifa Ahmed :

@Heath Ryans, ARV is from 165k to 180k, most of the house that was sold for 165k are just well maintained. No renovated house on market on that neighborhood now. There is one for 165k, it's just well maintained

These are some sold comps for retail flips. Your ARVs on Argonne are going to be a little bit lower since it's a busy street with a view of a brick wall and McDonalds parking lot.

compsboughtsold
-------------------------------------------------------------------
1516 Roundhill$75,000$190,000
1538 Ralworth$58,000$186,000
1622 Ralworth$77,500$180,000
1606 Shadyside$71,000$178,000
1603 Ralworth$37,000$178,000

Here is my estimation for the rehab.

New kitchen (with opened lay out, granite counter tops and refurbished ss appliances )- $8,000

New bathroom and finishing half to full bath- 8,000

New hvac ( new furnace and ac with duct work) $5,800

Hard wood refinish on living room-$900

Paint the whole house including basement- $2,500.

Carpet for bedrooms and basement- $2,500

New window- $2000.

New doors- $1,500

Refinish the basement-$6,000

Does it sound right?

Doing a rehab in Baltimore, dealing with the city to get permits and inspections can be an absolute nightmare, especially if you don’t know what you’re doing. Whatever contractor you wind up getting, I would suggest getting one that’s very familiar with and has a good relationship with the city, and that their costs/estimates include them pulling the permits. They will probably cost more than a contractor that doesn’t know the city like that, but they’ll be worth their weight in gold.

Originally posted by @Account Closed :

You really should sell.  You are way in over your head.

Just your estimates for kitchen and bathroom should be double what you estimated.  Im assuming city type pricing.

 Why would I double that? That's the price most investor pays on that neighborhood. I have talked to some investors. How would you make money paying $32k just for kitchen and bath?

Originally posted by @Account Closed :

965 ARGONNE DrBALTIMORE, MD 21218.......

This sold in may for $139,000.   1700 sq feet 3 bedder.

You sure about your ARV.

Yes I am sure. The house is on 16xx block, hillen neighborhood. It's a good neighborhood with ARV from $165k to $180k. 965 ARGONNE drive is in pen Lucy neighborhood.

I'm a real estate newbie that's from the area. I am pretty familiar with the contractor side of the business. Not looking at comps and just strictly your repair estimates they seem very low. I think that HVAC # is a pretty good price not including any duct work.. is duct already in place? Carpet seems low, kitchen seems low. Like @Matthew Paul said is the electrical been upgraded and how does the plumbing look? The kitchen and bathroom #'s will vary a lot depending upon plumbing/are you opening up any walls/ the quality appliances/fixtures you are putting in. 

Paint in Baltimore City is 2-3 dollars a sq ft, My whole job is doing project management for investors out of state,  figure to gut a house its about 50 dollars a sq ft right now from a Good GC with an MHIC. Also, if your out of state, how do you oversee your incredibly cheap HVAC guy?  If you don't have boots on the ground that can oversee your "GC" (who seems like he's just gonna change order you to death, cause prices seem low), then your going to be part of the very long list of out of staters who read an article somewhere, that said you can make a lot of money flipping in Baltimore, and then are "one and done" investors in Baltimore.

Originally posted by @Ian Barnes :

Paint in Baltimore City is 2-3 dollars a sq ft, My whole job is doing project management for investors out of state,  figure to gut a house its about 50 dollars a sq ft right now from a Good GC with an MHIC. Also, if your out of state, how do you oversee your incredibly cheap HVAC guy?  If you don't have boots on the ground that can oversee your "GC" (who seems like he's just gonna change order you to death, cause prices seem low), then your going to be part of the very long list of out of staters who read an article somewhere, that said you can make a lot of money flipping in Baltimore, and then are "one and done" investors in Baltimore.

My HVAC guy been on the business for more than 20 yrs. What would you suggest? How much does a project manager charge me to oversee my GC? The house does not need gut rehab. What would you say about the other estimations( kitchen, bath, basement refinish...etc)

Originally posted by @Stephen Ray :

I'm a real estate newbie that's from the area. I am pretty familiar with the contractor side of the business. Not looking at comps and just strictly your repair estimates they seem very low. I think that HVAC # is a pretty good price not including any duct work.. is duct already in place? Carpet seems low, kitchen seems low. Like @Matthew Paul said is the electrical been upgraded and how does the plumbing look? The kitchen and bathroom #'s will vary a lot depending upon plumbing/are you opening up any walls/ the quality appliances/fixtures you are putting in. 

 The electric and plumbing is something to consider. The hvac guy do the duct (just don't open and close the drywall tho). Have you done a rehab before? I like to know about your experience 

Originally posted by @Matthew Paul :

@Khelifa Ahmed  I have done a few rehabs in my day . I am a contractor .  There isnt enough room on the internet for my experiences 

 It's good to be a contractor on your own deal. Do you think my estimation is too low? My estimation is just from some investors who said how much they pay for rehab. I haven't done one yet. I'm just trying to picture what to expect concerning about rehab costs and GC.

@Khelifa Ahmed I am a contractor as a business . 

Expect your costs to be more than you planned on , It will take longer than you think . AND the cheap guy will cost you more in the long run than a professional contractor