First Investment and Need Some Assistance

Hi Justin!

You're off to a great start with this potential flip, and it's wise that you're running the numbers ahead of time and involving your father early on. Based on the figures you've shared, the deal looks promising, but a lot hinges on verifying your renovation costs and confirming the true ARV (After Repair Value). You've estimated the ARV between $500,250 and $543,750, with your own comp analysis putting it on the higher end. Until you can confidently verify your comps with nearby recent sales, it's best to stick with the conservative estimate of $500,000 when making financial decisions.

The purchase price of $240,000 seems fair, especially since the listing agent has indicated that this would secure the deal. With $110,000 in renovation costs, $45,000 in closing costs (about 9%), and $30,000 in carrying costs (about 6%), your numbers are within the expected range for a standard 3–6 month flip timeline. Your goal of earning a 15% profit (~$75,000) is also realistic and healthy for a project of this scope.

When you walk the property tomorrow, make the most of your limited time. Focus on capturing detailed videos and photos of every room, narrating what you see, what you think might need work, and any questions you have for your contractor. Pay particular attention to the foundation, roof, HVAC, plumbing, and electrical systems. You’ll also want to evaluate the kitchen and bathrooms—especially the layout and whether you can work with existing plumbing—as well as check windows, insulation, and any visible signs of mold, pests, or structural issues. Don’t forget the attic, basement, or crawlspace.

As for the renovation, your next step is to get a contractor to give you hard numbers. Ask for a line-item breakdown covering demolition, kitchen upgrades, bathroom remodels, flooring, paint (inside and out), roof/windows, HVAC, and any curb appeal improvements. Also ask about their availability and timeline for completing the job. These details will help you firm up your budget and evaluate how realistic your profit expectations are.

Since you're open to a joint venture (JV) to get this deal done, consider what kind of partner you need. Is it someone to bring funding? Manage the rehab? Share risk? Be very clear about each party's role, responsibilities, and how profits will be split. If you go that route, make sure to document your arrangement in a proper JV agreement—ideally with help from a real estate attorney.

It's also worth thinking about your exit strategy. If renovation costs or timelines look worse than expected, you might consider pivoting to a BRRRR (Buy, Rehab, Rent, Refinance, Repeat) model. In that case, you'll want to check rental comps to determine if the property could cash flow after refinancing at 75% loan-to-value. This alternative can reduce risk if the flip market softens or you can't sell quickly.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.