Hi BP! I have a deal that I am looking at for a fix and flip, and every time I put in my numbers I am loosing money. I am being very conservative and have to use hard (expensive) money to do the rehab. Could someone take a look and give me a second opinion letting me know if I am missing something or if I am being too conservative with my numbers please? Thank you.
|Section One: Property Information|
|Heat Source||Natural Gas|
|Estimated Repair Cost||$40,000.00|
|Estimated After Repair Value||$270,000.00|
|County Appraised Value||$240,000.00|
|Section 2: Hard Money/Fix N' Flip Calculator|
|Purchase Price (B19)||$190,000.00|
|Purchase Closing Costs||$1,500.00|
|Holding Costs (W/S/G/PUD/etc)||$3,000.00|
|Down Payment (Skin in the game)||$90,000.00|
|Total Cash Needed From Lender||$144,500.00|
|Points charged by lender||11.5|
|Points added to loan||$16,617.50|
|Total Loan Owed Lender||$161,117.50|
|After Repair Value (from B25)||$270,000.00|
|County Excise Tax Rate||1.53%|
|Excise (sale) tax amount||$4,131.00|
|Realtor Fees 6%||$16,200.00|
|Our Closing Costs||$1,500.00|
|Their closing costs (they'll ask)||$2,000.00|
|Total debits at closing||$23,831.00|
|Total cash received if sold now||$246,169.00|
|Total Money in The Deal||$251,117.50|
|Total Profit (pre-income tax):||-$4,948.50|
|ROI based on 6 month flip||-11.00%|
The reason why you can't get it to work, is because it doesn't work. This isn't a deal. You are correct when you say you will lose money. Move on to the next opportunity. This one is a "dog".
Thanks @Joe Villeneuve for looking it over. I wanted to make sure I didn’t miss something before I passed on it.
@Mike Faulkenberry Are the sellers set on a 190k price tag? This deal works nicely for you if you can get it for 150k.
Do you have any cheaper lending sources? Family that would take 8 or 9% and no points?
@Aaron Montague thanks for taking a look. I did run the numbers at $150k, and I ran the numbers to see what was the highest I could go to be profitable and it was $158k, but this deal was brought to me by a wholesaler and they weren’t budging unfortunately.
Unfortunately I don’t have any family with that kind of money. I am still looking for the deal that will work for me.