Analyze deal for Flip or Buy and Hold

Analyze deal for Flip or Buy and Hold

Rental Property Investor · Houston, TX · Member since 2019 · 11 posts · 3 votes

Just got the appraisal for my SFH renovation. I like the numbers but would like to hear others input. Would prefer to buy and hold but may be better as a flip.

Purchase Price: $200,000

Repairs: $150,000

ARV: $440,000

Located in East End of Houston. What do you think BP community?

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  • Kenneth GarrettPro Member
    Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
    6y

    @Joseph B.

    Those numbers seem pretty high for a rental.  What’s the rental numbers in that market?  On the flip side it looks like a go.  That’s a healthy rehab number.  Looks like a 4-6 month rehab at least. Without any other information looks like a flip profit in the 50K range.

  • Rental Property Investor · Houston, TX · Member since 2019 · 11 posts · 3 votes
    6y

    @Kenneth Garrett yes it is a hefty rehab but is an older large home. I originally planned on living in it and renting out part of it on AirBnB but may decide in the future to rent it out. In that market rentals can be 2,500+. Estimated rehab is two months. 

  • Specialist · Paradise Valley, AZ · Member since 2018 · 3k+ posts · 2k+ votes
    6y
    Originally posted by @Joseph B.:

    Just got the appraisal for my SFH renovation. I like the numbers but would like to hear others input. Would prefer to buy and hold but may be better as a flip.

    Purchase Price: $200,000

    Repairs: $150,000

    ARV: $440,000

    Located in East End of Houston. What do you think BP community?

    Don't forget you will have cost of sales if you sell and that is generally about 9% so about $40,000 on a $440,000 property. It might work if everything goes according to plan. If no surprises, you could wind up with $50,000.

    What causes rehab to be so high?

  • Rental Property Investor · Houston, TX · Member since 2019 · 11 posts · 3 votes
    6y

    @Account Closed I went with a design-build firm to do a complete renovation plus addition. Received bids from 4 contractors and selected the one that was best for what I wanted to put into it. Higher end finishes, HVAC, complete repipe and rewire, etc. Built in the 40’s. 

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