Potential Deal. Need advice. Flip my own house?
Hello everyone. Okay. Here are the details.
Im a realtor. I've done over 6000 BPOs (HUD houses which are then checked out against an appraisal, and if more than 10% off I had to justify and support my numbers), and have helped other investors, and retail homebuyers and sellers. In other words, I don't know everything, but I do know values. As is, and ARV. I've also flipped houses, and renovated houses, and owned a few rentals, on which I did 90% of the repairs and renovations. So I have a pretty good idea on repair and renovation costs, but they are NOT perfect by any means. So now to what I don't know.
House is in one of the best school districts, and in one of the better neighborhoods. it is a 4/3 with 3200 square feet, on a full basement that is not finished but stubbed for bath.
If this house were in perfect condition: with new flooring, paint, landscaping, appliances, fixtures, it would sell for between 400-420K.
To get it in that condition would be roughly (and I've estimated high on all of it)
Upgrade to hardwoods on second floor, and refinish first floor. 12K
Paint interior 5K
Upgrade appliances and plumbing fixtures. 5K
Upgrade electrical fixtures (some have been upgraded to stylish black wrought iron look which is popular here) 2K
New HVAC first floor (second floor HVAC replaced already) 5K
Landscaping 5K (this may be really high, but I figure it pads the other numbers in case something comes up)
Total rehab 34K
So we've had some investors come and look at the house and offers range from 290-300K. Payoffs are about 280K.
The house is currently owned by my girlfriend and her ex-husband. She has to refinance, or sell before November 1. They were to split the equity in the house, but apparently in the condition it is in, to an investor, there is no equity.
So my questions are these:
1) Since other investors are interested in the house at 290-300, should my girlfriend just get a hard money loan to "buy" or "refinance" the house? Then she and I renovate the house and sell in march-April next year when the school district buyers heat up?
2) A regular investor would have to pay Capital Gains Taxes right? So since my girlfriend is currently on title and has owned the property for 16 years, we could save a big chunk of change versus an investor right?
3) With me being a realtor, I can list the property at a discount rate (still have to pay the brokerage a little fee) and we save about 12K in listing fees (still have to pay the buyers agent, unless I sell it personally).
4) Should we try to get the hard money, or should we be looking for a cash investor that might see a benefit of not having to pay capital gains taxes or listing agent fees, and partner with us?
Thanks in advance.
Best!
Barney