[Calc Review] Help me analyze this deal

1 Reply

Joel - I'm not familiar with the area you are targeting, so if we assume that your sales price is accurate (which I would verify with a realtor), other items that come to mind in your analysis are: 1) Renovation Budget - Did you get a contractor or a more experience person to confirm $100k is a good estimate based on the work? 2) Holding Costs - Seem a bit high to me at $15,000 per month. I know there is utilities, insurance, and taxes during the hold, not including your hard money points, interest, etc... but I would take another attempt at estimating that based off of the total capital needed ($507 + $100k + Closing costs). 3) Total Profit - Not sure $36,000 would be large enough given that the outlay of capital is $600k+. Personally, I would aim for a profit of 10-15% of the total capital invested for profit - So, in this example it would be $60-$90k in total profit. However, that is just me... others have their own metrics, targets, etc... I would check your renovation estimate and holding cost estimate and perhaps recalculate the profit amount. Once you make some adjustments you can also share with some flippers at a local real estate meeting and see what they think! Good Luck!