I'm starting to search for a first flip property and have come across one that I've been evaluating just to see if its the right scope and price I'm looking for. Ideally I would like to make 15 - 20k on my first flip. Below are some basics on this property. Please let me know your thoughts.
303 Gentilly Dr, Katy, TX 77450
Purchase price: 83200
comps I have show that a couple similar homes have sold recently at 150 and 190k and there is one on the market for 169k. In addition there are two similar homes (same plan) that are valued btw 150 -160 on Zillow (ya, I know that's is not the ideal thing to go by:))
I will be looking more at this to verify my rehab estimate as well.
Looking to have full financing (100% from bank or current equity) and turn in 4 - 5 months max.
Any advise or help would be greatly appreciated.
Mike C., Cast Homes
If I was you I'd talk to a realtor or two.
Ask him/her what the arv would be if you were to sell it today in move in condition (it shouldn't be too far off in 4-5 months). Any realtor would give you a CMA even before purchasing it if they think they have a chance at being your seller's agent once it's ready.
Looks like that property backs up to a commercial building. Maybe a retail strip center. That drags value down a bit.
The house has good curb appeal though. Looks like a nice 'hood. Convenient to downtown Houston vi I-10. I kinda like it if your rehab costs are right. That's the tough part though isn't it?.
In comparison to the houses it surrounds, it look like the least expensive house in the neighborhood. Needing the repairs will allow for updating kitchen and baths, which will make the house more desirable. I think its a great location, however I think it lacks natural gas. If you are going to update it, I would replace the windows and sliding glass doors.
I definitely recommend spending some extra time estimating your rehab budget and then figuring in a good percentage extra for a cushion. It seems like going over budget is one of the primary things that cause investors to lose money on their first deal. I just finished my first deal, and while my rehab was quite different for an early 1900's historic property I was sure glad to have gotten an excellent deal when buying because even though I went well over my rehab budget I am still poised to make money at close. Buying it right and adding an "oh crap" line in your budget can keep you in the black.
Hi Mike C.
Sounds like your numbers are ok and there may be potential to get a higher ARV. I would just make sure you have a good Realtor who can help you with these numbers. Specifically someone who knows that local area. Second have a good contractor this can drastically affect your project positively or negatively.
Having the right people in place and building your power team allows you make calculated risks. RE investing doesn't have to be scary if you are confident in the people around you and the information you are getting.
Unfortunately, this one may not pan out for you. I checked the mls and the listing agent says there are many multiple offers already in. You'll find that there is a high level of competition for properties in this price range and I am reasonably sure that this one will sell for significantly more than 83k.
I have lived in the Katy area and know this area well. I have a couple of rental properties still out in the Katy area and am still hunting for additional deals myself. Unfortunately properties like this that you find on har.com rarely end up being good deals because they get bid up to a point where it's no longer a good deal. You're going to have to find these properties before they hit the mls to be good deals. Also, you may want to consider getting properties that meet your quick and dirty math under contract first and then do your deep dive during your option period. When you do find a great deal, I'd be happy to share my contractor, real estate agent and stager with you. Best of luck.
@Mike C. , a lot of valid points have been made. I am a Realtor/Insurance Agent, if you'd like to set up a time to meet, feel free to let me know. We can go over lots of info.
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