Hello…I was looking for a form that has all the “estimated costs” involved in flipping. We have one offer on the table (it was a no-brainer to see the potential upside but other properties are iffy. I don’t want to forget any potential costs in evalating whether to pursue a property or not.
I have never seen a form like you want. Everyone wants ready made deals and forms and documents. Get a piece of paper and pencil and write it down. Like you said the one you are working on is a no brainer. those are the only kind I do any more. If I have to think too much it must not be a good deal. I also use excel to compare one deal to another as far as figuring cash flow and potential profit on a flip.
Most of the time I write in the margins anyway. I use it to help organize my walk through. I then figure if it will be $1k or $30k to fix up. I pretty much know that my offer is going to be what the market price is for that property minus my profit and fix up costs and expenses.
What I was worried about, isn’t the “no-brainers”, it’s the ones with a quick turn around. I have been pursuing NODs but nothing thus far, so we decided to go after some “fixers” that are already for sale. We want to make sure all of the expected “costs” are calculated so to decide if it is worth the investment, of time and money.
Some of these ones appear to be a 4-6 week turn around. (My hopefully “no-brainer” is a complete overhaul).
Costs like realtor costs (yes, we’ll use ours);
Escrow fees (is there an estimated % of these based on the sale of the house??)
anything I am missing???
The “rehab” costs we get, but to decide to do a flip and make $10,000 would be great. It seems there could be a very short line from the $10,000 to being in the red. That’s my concern.
Any more thoughts?
I really appreciate this forum. I am have researching my butt off and we are “in the game” now, so advise is greatly appreciated!
That is the squeeze. It depends on the deal. If it takes a lot of work to fixup or the house will take a long time to sell after fixup, I have to ask for a bigger profit. In any event I don’t put in less than $15k for a deal because in general my carrying costs are $1000/month (closer to $700 but for rough rule of thumb I use $1000/month) and a house in Houston generally sells in 3 months. That can eat up your profit really fast and have me doing fixup for charity real fast. Remember if repair goes over or the house dosen’t sell, those costs are made up from your profit. The house won’t sell for more than retail.
Of course, I’m also in favor of the stubby pencil methods, in which case you could just take your stubby pencil and fill out the forms like those at http://www.fedhomes.net/resource/links/forms.html. They may be of some help. The last form on the page is really good.
Go to your material suppliers and get a rough estimate what materials cost per sqft: tile, carpet, toilets, etc. If you pay someone to do the work talk to contactors to see what they charge per sqft on a certain project. At first I would stay away from major repairs like the roof, foundation, and electrical rehaul, unless you get a huge deal these things can eat your profit Use those forms posted by Debora and fill them out when you walk through a house. take notes and use a caculator. determine the sqft of each room and what it needs. then do the math. determine the ARV and subtract the repair cost, closing costs, carrying cost, etc., then subtract the profit you need to make it worth while and what is left is what you offer for the house. Be conservitive in your numbers. round up for repairs, round down for ARV. I’m a newbie as well so I may be off. If anyone disagrees or has something to add let us know.
I am looking to get into the “flipping” business. I am a genaral contractor out here in southern California, so needless to say the market is tough. My funds are minimal, and my credit is less than desirable, but i’m working to correct that. I guess i’m just looking for any basic iinfo you might have as to how to get started. Maybe some “no money down” ideas or similar. As I am a contractor, and will be doing all the work myself, or subcontract out to friends, I don’t need any advice as far as costs vs. profit. I just need to know where to get started. I’m kinda lost in all the different articles that are out there. Thanks for your help. If i can be of service to anyone, please let me know.
These are from the book “The Pre-foreclosure Property Investor’s Kit” which is where I found them orginally.
They are basic, but they seem to cover the important points. Now all i need is to find a way to estimate the repair costs accurately! KMAC1975 - I am in So Cal also, and would be interested in working with you. Just getting started myself - maybe we can help each other out.