I have had several potential deals run past me but I guess my 1st question is this…Even if I buy into this deal how can I know that I won’t be stuck with it when I go to sell it after rehab? I’m new to this and really don’t want to get in over my head. I have a partner who wants to invest but I don’t want to be sitting on this deal after purchasing it and having him look at me like I have 3 heads…
The ARV is 175k. The purchase price is 50k, with 65k of repairs. It is a 3-unit that can generate $2250 per month in rental income when completed (almost done now, about 3 weeks left to go) I guess I’m afraid to mess this up, but I know I want to do this to make money. ANy help and suggestions would be appreciated. I 'm a newbie at this, but with 15 years mortgage experieince I guess I’m out of my comfort zone because I don’t know this industry as well as I do mortgages. Thanks
I’m new to the board and your scenario caught my eye.
As a wholesaler and former landlord, my 1st reaction; not a good flipper (not in my market; chicago), because too little spread after cost ($50k or less). Lot depends on your market trends. Still, isn’t everyone looking for a deal? If, 80% AV is a deal, you may clear $15k. I’d compare buy-hold-rental strategy, since cash-flowing over $1000/mo & write-offs, then resell when market rebounds +natural appreciation & or accelerate payments; profits may look better.
My 2nd reaction; your hesitation, probable for good reason. What resulted from the several other deals you pasted? Information is the key. Can’t get enough education, even free webinars. Study to ‘know’ your market; find out what’s working in area, what’s not, etc. Duplicate what’s working and you’ll attain your goals. Good luck!
65k in repairs has a lot of room for error. For a first deal, it seems kinda risky. But you don’t make money by not risking.
Your wording makes it seem as if you already bought the property, “3 weeks until completed.” Did you already start it?
You always need to have a backup plan and it seems that you do. Renting this property seems like a good money maker. Why don’t you do that instead of flipping. This market is great to buy, hold, and rent.
Sounds like this property will cash flow well if your rental income estimates are correct, and there are no large operating expenses or huge tax assessments or large vacancies. I’d recommend you hold onto it. At 50+65 you are already at 66% of ARV. Once you factor in any interest cots, insurance, unforseen rehab cots, etc, you’ll be above 70% ARV. To an investor, once you take into account their closing costs, this may not seem like such a great deal, depending on your market. Hold it, collect cashflow, wait for the market to turn around, then cash out.