Las Vegas Flip in Section 10 Potential $400,000 Net Upside

[John Jack R.]

Okay, I have been working on this deal with an associate and friend Victor G. (also a member on this site) for the last six weeks, and we finally have it under contract. Bank REO, 4,700 square foot two bedroom house sitting on half an acre with a swimming pool in the middle of the living room!

The plan is to turn it into a 4 bedroom 4 bath, 5,000 square foot home, moving the pool from the inside to the outside, and of course getting rid of the river rock!

1780 Belcastro Las Vegas 89117 under contract for $380,000. The house sits in Section 10, much sought after and the comps are as follows;

a. Minimum market comp is $146 a foot, $730,000, if we sell at minimum.

b. Average market comp is $188 a foot, $940,0000, if we sell at average.

c. Maximum market comp is $229 a foot, $1,145,000 if we sell at the maximum.

The plan is to turn it into a 4 bedroom 4 bath, moving the pool from the inside to the outside, and of course getting rid of the river rock!

I have just had my architect develop a site plan and "as is" layout, as well as "new" drawings and need to get my electrical and engineering and mechanical estimates, but I figure the rehab could be anywhere from $140,000 to $180,000. With holding expenses will be in the entire project for around $580,000 to $600,000. 

The upside is still pretty big even if we sell at minimum per square foot comps. My question is the regarding the amount of brain damage and time it will take and would I be better off working three or four smaller deals. Even if the combined upside is not as great, there is less risk in numbers. 

Any ideas?

[Charlie Fitzgerald]

@John Jack R.  I am going to throw in with Christopher and Omar on this one.  I think you are going to be into this for $200k minimum renovations and it could go to $300k very easily.  I also agree with the resale value assessments at $700-$750k and where this home is will not command the same level of attention and rapid resale as the ones very close and behind the gates.  You will need everything on this to go perfectly sand get top dollar in 30 days or less and you MIGHT see $100,000 in ROIC (return on invested capital).  With your resources and system for smaller flips Jack, you can do that and double that on 3-4 properties at 1/2 the price of this one.  That's my $0.02 worth.