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*This link comes directly from our calculators, based on information input by the member who posted.

Originally posted by @Eric Dami :

View report

*This link comes directly from our calculators, based on information input by the member who posted.

Is this your first flip?

There isn't nearly enough information on the calculator to give me a real indication of what is actually included in your numbers...but if you're planning for $35k profit...can you also afford to lose $15k...without experience it's possible to have your holding costs be much higher...and your renovation costs be 50% over if its your first project and you don't have actual contractor bids and are just guessing based on having read J Scott's book. Your agent fees are far too low. You'll be paying at least 5-6% not the 2.5% you have on your sheet (unless you are an agent also and will only have to pay the buyers agent)

Again...bottom line not enough details here...you chould make $35k or you could lose $15k with these number. Numbers on a calculator can only give you a snapshot, it's not always reflective of real life.  

Hi James - Thank you for your response. To address the fee %, I later read the 6% recommend after posting, so I will ensure that for the future. To address the rehab budget, what is your recommend way to estimate these prior to seeing a property? 

A possible solution: I could do more research on how much and timeframe each part of the house to redo (e.g. New bathroom, New kitchen, etc?)

I would definitely research individual costs for rehab projects (floors, bathrooms, kitchen repair, etc.) You need an idea of cost per item; example how much is a bathroom vanity, or how much is a new garage door with installation? After that you'll have a capital cost figured out giving you a better offer price.  

Holding costs seem low.. that's some cheap money or you've got a lot of cash you're putting in.

Selling costs ARE low. 

Rehab has no details, could be 50k, could be 65k, could be 100k.

Originally posted by @Eric Dami :

Hi James - Thank you for your response. To address the fee %, I later read the 6% recommend after posting, so I will ensure that for the future. To address the rehab budget, what is your recommend way to estimate these prior to seeing a property? 

A possible solution: I could do more research on how much and timeframe each part of the house to redo (e.g. New bathroom, New kitchen, etc?)

1.  Read J Scott's Book
2. Spend lots of time in Home Depot and Lowes
3. Find a rehab calculator like the one at David Robertson has on the BP Fileplace and on his website houseflippingspreadsheet.com
4. Then use the homewyse.com website to get some estimates of what the line items in David's spreadsheet will run for your market. In particular the labor costs. Update material costs based on what you saw at Lowes and Home Depot...but check this against homewyse as well
5. Start making nice with a contractor and ask to see their existing job sites.
6. Use J Scotts method of going to Home Depot or Lowes early in the morning and see who is checking out at the contractors desk if you need a place to start
7. When starting don't try to estimate by only looking at an MLS listing
8. If you're new the odds of you finding a deal on the MLS are rare. It not impossible but understand there are dozens if not hundreds of other flippers out there who can estimate rehab and ARV just by looking at pictures and if they haven't already paid cash for the house, than it's probably not a good deal. Again...there are hidden gems, but don't expect this to be the normal.
9. Start looking at as many houses as you can. Take lots of pictures and videos when doing your walk through.
10. Do mock-up construction budgets
11. Share these budgets, pictures, videos with more experienced investors and contractors in your market (other markets wont be as useful) and ask them if the numbers you have make sense. They'll start to point things out you may have missed.
12. After doing this a few times you can get comfortable that your numbers are about 80% correct and you can just build in a 20-25% contingency for the stuff you missed 
13. Now you're ready to start pulling the trigger

Of course you can ignore all of the hard work up front and just dive in...but then you also need to be prepared to lose $20k...if you don't have $20k to lose...spend the time to do your homework and practice first.

Hi James - Thank you very much for these actionable steps! I will do this now and over the next few weeks!

Originally posted by @Eric Dami :

Hi James - Thank you very much for these actionable steps! I will do this now and over the next few weeks!

 It's not intended to be an all inclusive list. Just a set of suggestions for steps one could take. Not necessarily a play by play of what you should do. I should also point out I don't personally use David Robertson's spreadsheet...I've just seen it and it's very comprehensive to use as a starting point when you don't know what things you need to look for and consider.