Oh yeah... Basically I'm wondering if this deal looks realistic. Is this a good return for the flipper? Is it even reasonable to ask for $20,000 for this amount of return? Help!
I am no expert at this, but from what I have seen, I believe there are many costs for the flipper that is not included with this. For example, there is usually a 6% realtor fee ($15,000 if the sale price is $250,000). Plus the cost of financing the deal or if the true cost is actually $30,000 for repairs. Also, the holding costs probably should be higher if it is a big rehab since it may take longer than 3 months or if the seasoning time is 6 months at a minimum.
Let's say ARV is $250,000, 70% of that would be $175,000 - expenses (6% realtor fees ($15,000) + holding costs( $2,400(6 months)) + $30,000 (rehab) = $127,600.
Therefore, you may be left with $10,000 - $15,000 for wholesaling fee.