Hi BP crowd,
I have a few rentals now (4) and trying my hand at flipping next.
Rockville MD area with average 360k properties.
Ran across a seller who is looking to unload a place for $225k (that is our max offer that is currently being considered). She is selling for a relative and any profits will go straight to MD to cover her elderly relatives senior care costs. - hence they aren't too concerned with price
My rehab partner is estimating 50-75k for repairs to cover roof, kitchen, bathrooms, ect.
70% rule would argue no more than $180k sales price but that is virtually impossible in the DC metro area.
My first thought is that you need to establish the ARV for this specific property. You mentioned an average sales price for a big area (Rockville), but what's the actual ARV for a renovated property in this neighborhood?
The 70% rule does not work in the DC area and it's completely possible to make a nice profit on a flip without following it, but it still comes down to the numbers.
I see a lot of people attempt flips in the Rockville area and fail. There are severa key mistakes they make. They do not put in the finishes or attention to detail that your Rockville buyer will expect, and then they overprice the property creating larger holding costs. This happens time and time again. Then also they just simply pay too much for the property. There is a flip on the market in 20851 right now that is guilty of all these sins.
Purchased for $230k.
Spent approx. $80k on renovations ($10k over est.)
House looks amazing!
Put on market for $399, had 10 offers immediately and sold in 1 day for $420k!!!
Looking for the next one!!!
Nice work Chris! Have you tried your hand at any others this year?
Id be curious to know if you have any other projects going on as well. I was pleasantly surprised when I saw your flip. I think your flip too incidentally caused a lot of people on that same street to sell subsequently with your property providing a high comp for them.
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