Pittsburgh PA first flip- good deal or no?

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Pittsburgh PA first flip- good deal or no?

Pam J.
Pittsburgh, PA · Member since 2018 · 15 posts · 1 vote

hello, new here and getting into investing.

We currently own a rental in the south hills part of the city and looking for our first flip.

Would you do this deal? It is a foreclosure in pittsburgh (where we live). This will be a big sweat equity deal, as my husband and brother are skilled in cosmetic fixes and looking to get their hands dirty. We will have to outsource hvac, windows and electrical work.

The ARV is from our trusted real estate agent.

Asking: $65k

Target price :$55k cash

ARV: $120k

Rehab: goal $29k based on not having more than 70% into the deal. It’s a tight squeeze. The house needs:

Hvac

Siding

New hot water tank

New roof on small detached garage and possibly house (it was snowing on show day)

New bathroom and kitchen

Add a half bath 

Floors, paint, fixtures

Porch rehab 

All new windows

It’s a 3/1/1 approx 1500sq ft

This would be fully funded from a family member using a intrafamily loan and they would receive 4% of the sale price at closing along with a low interest rate before then. 

Do the numbers work? What am I missing? Give it to me straight. I’ve been creeping in all the forums here and appreciate the feedback.

Any tips on pittsburgh locations for flips are welcome. Where we live in the south hills is too expensive for our budget so we’re looking at different city areas.

Thanks!

Pam

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Brian Pulaski
Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
8y

@Pam J. the scope of workyour described is more like $50-60k minimum where I used to flip and that would be with doing a lot of the work. I added a bath, it was $10k. HVAC (boiler, furnace?) is probably $6-8000 minimum. Kitchen $7-8000 if you do the install. Bathroom remodel is a couple grand. Windows will be $4-6000, roof will probably be $5-7000, siding will be $10k I find your paying for it to be done. Flooring, paint, etc, your another $5-10k for the "other" work. What does your $29k budget look like?

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  • Nik S.
    OH · Member since 2014 · 454 posts · 227 votes
    8y
    Pam Janovyak assuming your subbing everything out (I did a quick estimate) your rehab budget is way off. Even if you were doing a portion of the work yourself, $29k is not much for the work you want done. For example, you stated HVAC, is it an AC / Furnace? Your roofing expense could easily be $5k-8k depending on home. Adding a bathroom? New kitchen... estimate higher for your rehab :-)
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  • Nik S.
    OH · Member since 2014 · 454 posts · 227 votes
    8y
    For windows, double hungs w/ discount are around $150-$180 each. Installation per window from a professional can run as low as $100-$200+ a window, easily. All factors depend and of course contractor selection changes numbers.
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  • Brian Pulaski
    Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
    8y

    @Pam J. the scope of workyour described is more like $50-60k minimum where I used to flip and that would be with doing a lot of the work. I added a bath, it was $10k. HVAC (boiler, furnace?) is probably $6-8000 minimum. Kitchen $7-8000 if you do the install. Bathroom remodel is a couple grand. Windows will be $4-6000, roof will probably be $5-7000, siding will be $10k I find your paying for it to be done. Flooring, paint, etc, your another $5-10k for the "other" work. What does your $29k budget look like?

    1Reply
  • Pam J.
    OP
    Pittsburgh, PA · Member since 2018 · 15 posts · 1 vote
    8y

    @Nik S. thank you for your reply- for hvac, definitely furnace and possibly AC

    The only thing we would outsource is furnace (and ac) installation, windows, and any electrical work. Everything else would be materials only 

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  • Pam J.
    OP
    Pittsburgh, PA · Member since 2018 · 15 posts · 1 vote
    8y

    @Brian Pulaski thanks for taking the time to break down your numbers. 

    We could forgo adding a half bath, keep that as an extra if things come under budget.

    The siding is cedar or wood shingles on the top half of the house, so our choice would be to replace individual ones and paint them, or redo with new siding.

    0Reply
  • Pam J.
    OP
    Pittsburgh, PA · Member since 2018 · 15 posts · 1 vote
    8y

    and roof is a maybe, the snow is melted now we could look before offering 

    0Reply
  • Jay Belcher
    Investor · Canonsburg, PA · Member since 2016 · 132 posts · 59 votes
    8y

    Your overall numbers work, if your rehab budget is correct. As others have pointed out though, it seems like you're trying to get a lot done for $29K. Also the concept of the work your husband and brother do being treated as material cost only is not really a sound approach as that labor does still have a cost.

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  • Pam J.
    OP
    Pittsburgh, PA · Member since 2018 · 15 posts · 1 vote
    8y

    @Jay Belcher good point on labor costs. You’re right.

    We discussed it last night and decided our target price needs to be a lot lower for us to feel comfortable. It sounds like a $40-44k target price and $40-44k rehab budget is (while still tight) more realistic

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