Updated over 2 years ago on . Most recent reply
Analysis for Fix and Flip
Hi all -- I'm new to real estate investing, but looking to get into SFR fix-and-flip. (I'm in NYC, and looking at properties in Hudson Valley and Upstate.) I'm hitting a big stumbling block, though, and wondering if anyone with experience can share some tips.
From everything I've studied, it boils down to three numbers: 1) Purchase Price, 2) Rehab Cost, 3) ARV. The formula being: Profit = ARV - Purchase Price - Rehab Cost.
The problem I have is getting reliable figures for 2 and 3 — Rehab Price and ARV.
For rehab price: getting a contractor to give me a ballpark estimate seems the natural approach, but that seems doable only for 1-2 properties. If I'm looking at a dozen properties, it's hard to ask a contractor to run around with me to them all.
For ARV: the right way seems to be to look at comps. But without experience, where do you get reliable numbers? I've asked my agent to run a CMA for me on some properties, but it seems impossible to know if it's apples-to-apples, given that I don't know if those are pre- or post-rehab. I can use the basic criteria (BRs/BAs, sqft, year built, etc), but one property might be a dump sold to an investor for a gut-job, and another might be a beautiful turnkey for an owner-occupant.
Anyone have any insight to share? Appreciate any and all thoughts.
Shulem