Teaneck, NJ fix and flip newbie question

[Nidia C.]

I received a phone call yesterday from a yellow letter campaign I sent out. Motivated seller because he recently moved. However, he is firm on his price. My plan is to fix and flip this property, but I ran the numbers as a rental to see if it cash flows. (It does not). Basically, I don't want to put myself in a bad situation if it doesn't sell.  It's a 2 bed, 1 bath colonial in Teaneck, NJ and the seller wants 280K. He said the attic could easily be converted into a 3rd bedroom, and that the kitchen was recently remodeled.  We agreed that I would give him a call if I  am willing to offer around 280K.

Reason for this post: The ARV is 350K. So if everything is pretty fixed up (as the seller) says, and I convert the attic to a bedroom, I think this is a good deal. Since this would be my first deal, I need an objective opinion. Should I take the risk or not since it doesn't cash flow?

Any comments would be greatly appreciated!

[Avi-Gil Chaitovsky]

Nidia,

Some Bergen County towns don't allow living space in the attic.  I don't think Teaneck is one of them (I believe Bergenfield is), but you should check before jumping in.

Make sure to take your holding costs into account if you're planning to flip - permits take notoriously long to get approved in Teaneck.

Also, many people would tell you to make sure you have a backup exit strategy if you can't sell - with no cash flow, doesn't sound like you do.