Live in Flip - Looking for Advice
Hi All,
I'm interested in purchasing a property in Tolland County, CT. It's a 1070 sq.ft. 2-story home (photos attached).
All utilities are functional and city municipal: electric, water, sewer, and gas heat.
Here's my cost analysis / scope of work: https://docs.google.com/spread...
Acquisition: -$33k
Rehab: -$44.8k
Closing: -$1.4k
Holding: -$4.4k
Sale: -$10.5k
Total Cost: -$94k
All-In Cash Cost: -$83.6k (does not include sale costs deducted from proceeds)
ARV: $115k
Profit: $21k
All-In Cash Cost / ARV: 72.3% (just above the 70% rule, but I'm also living here)
My first first goal is to find a new place to live. I'd be moving in and doing most of the work myself (as broken down in the spreadsheet above). I understand it's not a long-term, scalable strategy, and I'll essentially be making close to $20 / hr... but my hope is that the experience will be worth the opportunity cost. I'm a software developer by day, and I'm looking forward to physical labor.
I'd prefer to target higher value deals with larger upside and lower cost / sq.ft. but the barrier to entry is pushing me back down. I've considered hard-money for a larger deal, but doing cash for the first deal feels more my pace. I've also considered 203k / FHA, but because I've been contracting less than 2 years, I need to wait until next year.
I'm planning to sell, but I was considering renting as a secondary exit strategy. At that point, I should qualify for conventional loan products. At $1.1k / mo rent, 50% of which go to expenses, I'm left with $550 / mo before PITI. Assuming a cash-out refinance at 70% LTV, I'll pull out $80.5k, which is most of my initial investment. Then, with a 3.5% 30-year note, I'm looking at $362 Monthly PI, $235 Monthly Tax, and $125 Monthly Insurance. This means I'd be operating at a loss of $172 / mo. So, I'm not planning to pursue this exit strategy.
Just looking for general opinions on this project proposal.
Thank You!
