First purchase Calculations

[Kenny Kuramoto]

Hi I'm into a contract of a property that costs $135000. Rehab will cost about $50k. I want to know couple things.

1. Property is a 2x1. If im flipping it and turning the garage to 3rd bedroom(its already used as one but terrible quality). Flipping the property can i label it as 3x1 or it has to be permit build 3rd bedroom to sell it as such.

2. Hard Money are they all 65% arv for brand new investors? I called mofin and 2 others. Seems like it's all 65%.

Reason why I'm asking is the property is $240k arv at 3x1. 65%x$240k=$156k. All in reno plus harmony I'm assuming is $196ish. I still have to put in $40k. This property is only a good flip but not brrrr. Flipping at $240k-$185k= $55k-fees. 

what's everyone's thoughts on this. Thanks!

[Adam Oldham]

@Kenny Kuramoto

When converting the garage into the bedroom make sure it has a closet and is air conditioned space. 

To show the bedroom on county records it would need to be permitted but I’m not sure how it would affect the sale price if you didn’t get that permitted, likely I’m thinking it would not matter.

Of course don’t forget to take into consideration the value a garage brings, if it’s not valuable for people to have in that market then go for it and take it out.