Missoula Property Analysis

2 Replies

Hey fellow investors, 

I figured it was about time that Missoula had an area where we could post potential deals that we are looking at and have other people look at it and contribute thoughts and ideas. 

I'll post a deal that I have been looking at and would lover to hear what other's thoughts are on it. This is a potential fix and flip. I'm sure that most of you have seen this house posted on the MLS.

The address is 120 Tahoe Drive, Missoula, Montana 59803. 

Here is the information on the house and my cost break down with my estimates. I would love to hear what other people think about my estimates and would love to hear where I am wrong or what you think I am missing. 

Current Asking Price: $130,000 - Irrelevant to me - I would be looking for a purchase price of $90,000

Costs Breakdown

Complete gutting of the house (labor only):                $1000

Mold Remediation:                                                           $5000

Roof:                                                                                   $8500

HVAC (Unit and Ducting):                                                $7000

Basement Reframing:                                                      $3000

Electrical Rough In/ Updating:                                        $6000

Plumbing Rough In (Basement)/ Updating:                  $6000

Insulation/ Drywall/ Tape and Bed:                               $8000

Interior Paint:                                                                    $3500

Flooring:                                                                             $8000

Doors and Hardware:                                                      $3000

Trim/ Baseboards:                                                            $3000

Kitchen (Cabinets/ Countertops/ Appliances):           $10000

Bathrooms (3 full):                                                          $12000

Lighting:                                                                              $1500

Exterior (Paint/ Fascia/ Fence work/ Cleaning)             $5000

Permits:                                                                               $2000

Miscellaneous:                                                                   $5000

Total:                                                                                  $97500

An investor friendly realtor that I have been working with and I have pinned the ARV at $260,000. I run my numbers 10k below that just to be safe which gives me and ARV of $250k. I have a hard money lender that will give me rates between 8-11% with points between 1-3. There are a couple other little fees adding up to about $1150. They are willing to lend 80% of the purchase price and 100% of the repair costs up to a total of 75% of ARV. I am putting in 9 months of use with hard money which would put my money costs at $9250. Repair interest would come in stages but could be up to $8000 if it was all calculated at once and not in stages.

This puts me at a total of $204,750 all in (roughly).

If I list at $250,000, I would pay 

6% realtor commissions:                     $15,000 

Closing costs of about 2%                       $5000 

Punch list items/ concessions:               $2500

Total:                                                        $22500

This makes 

Sales Price                $250,000

Selling Stuff           -    $22,500

Money In               -  $204,750

Profit                            $22,750

What do you guys think? What am I missing? What should I put in or take out? I'm excited to hear everyone's thoughts!

Very tight and you probably are going to have some utilities to pay.. not sure how much those are if its cold..

I think your numbers like this have to be closer to 50k profit so when it does not go right and sometimes it does not you still make money.. if it does not go right the only ones making money are your investor friendly realtor and your investor friendly HML :)

20k on a flip is as stated pretty thin..

but I would love to do business there.. great place.

Dave, I just saw this. I'll take a look at the numbers and try to compare it to some of the work we've done and see where it looks like your sitting. I'm going to start running some numbers on possibilities myself because I enjoyed the flip I did. 

Initial look: 

Demo labor looks way low. Thats roughly 5 man days. I'm guessing the full gut will take longer and way more man hours.

I compared your electric, plumbing and drywall numbers to a basement finish out we bid out and that seems really close. ( I estimated a 1200sqft basement?)

Flooring Seems high depending on level of flooring

I think your numbers are pretty spot on and conservative. Jay has a good point, but I guess it comes down to how well you think your numbers will match actual costs and what you are comfortable will. An investor/mentor I know says that it always take longer than you think and costs more than you think. 

Good luck if you go for it.

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