First flip.. nervous/excited/anxious... any advice?

Question

I have a deal for a good 2 bedroom condo in the works.. It's going to cost me 235 and about 7k in closing bring me to 242k in... the u it needs about 15-20k rehab to put it in mint condition (confirmed by the inspector who also works as a GM).. next door just sold for 295k within 5 days of people listed ( we are in a hot market in NY and many cash buyers are out there.. I work as an agent so I got in on the deal early sale day it was listed.. My broker believes it's a "no brainer" since I believe I can get more then he 295k accepted the neighbor sold since he/she sold out only within 5 days... I just wanted to see if my numbers are tight and still room for profit even if I needed 2-3 months of holding... 262k estimated all in... 309,900 estimated list price.... would take 295k 2 months holding (3k) = 265k Realtor commission (minimal im the realtor) Closing 9k .... 265k+9k = 274k 21k profit quick turnaround... Worst case scenario the HOA allows pets and comes with a parking space so I could rent for about $1900 which covers my fees and should cash flow $400 give or take ... It's an extremely competitive market here in NY with a surplus of buyers and a dwindling supply of homes which makes me think (confident) I can get more after the rehab.. my offer was accepted although another buyer wanted to come in cash after me... I feel pretty confident... any advice???

Luc Boiron · Answer

The condo was just under 1,000 sqft, 2 bed, 2 bed. Floors were about $2.85 (CAD) at Lumber liquidators, they are a floating bamboo engineered floor. Great colour. Install was about another $1.2-1.4 psqft.

Luc Boiron · Answer

@Meti Kay Don't buy a deal to flip because you think the value will be going up. Make sure you take a good look at what was done in the unit next door to make sure your finished product will be as nice, or nicer.I never put in carpet, I actually put in engineered bamboo in that condo.Your costs seem reasonable for the work you plan, so it looks like a good deal!If you want to see a 3D tour of the condo I did, here is a link: https://gallery.vrlisting.com/3d-model/802-2550-la...

Luc Boiron · Answer

@Meti Kay Your profit is slightly on the low side, but it doesn't look bad if your estimate on the $295 is conservative, and you believe you could do even better.Make sure you are accounting for all numbers. In my market, Land Transfer Tax is a b*tch that eats into deals. Financing is expensive - it sound from your holding costs that you likely are getting a traditional loan for it to be that cheap. Keep in mind that if you were doing this deal with private financing you wouldn't be able to make the numbers work, but using bank financing to keep that down is a way to help you make the deal work.How confident are you in the $15-20k reno? Do you have someone who can do it?Double check all your numbers. Will you be getting insurance (liability at least, I know it's a condo)? I reno'd a property that was 2 bed 2 bath and the reno was around $30k, and that was a pretty good price. It was fully done though, both baths, kitchen, paint, baseboards, all floors, etc.Overall my opinion is that it sounds pretty decent, just make sure you're not missing any major costs.

Luc Boiron · Answer

@Meti Kay It sounds like you should be able to keep it on budget, as long as you have priced out that heating unit. Not sure what type of condo you are getting, but some would replace a broken window for you out of your maintenance fees, so might be worth looking into.This place sold for $285,000. A bit of an older building in an ok area, not close to downtown but close enough to transportation.Good luck!

Meti Kay · Answer

Luc Boiron amazing transformation.. I will be working with 1 less bathroom but have to replace the Heating unit and and air conditioner as well as a broken window.. also the kitchen is about half the size so I'm hoping I can stay within budget by doing some work myself (demo, painting, deck restoration) it's about 900 sqft.. similar units seem to be flying off the shelf according to the local MLS so I'm confident.. it's definitely inspiring seeing your amazing work.. just curious I know it's a different market but how much were you able to sell that for?

Meti Kay · Answer

Luc Boiron the appreciation would be a bonus. The neighbor just sold the same unit for 295k so I believe I have nice room to work with it won't be a huge profit but should be quick turnaround time and better then the banks %1. Just trying to figure if dog owners would prefer carpet or thick laminate flooring. Just seen your photos the condo looks amazing do you happen to have before photos? What did the floors run you.. the condo I'm working on is about 900sqft in total

Mark Mathews · Answer

Remember to get at least three quotes from contractors, and check their referrals. Actually go see the work they did and talk to the homeowners about their experience with the contractor.

Meti Kay · Answer

Thanks for the replies much appreciated

Meti Kay · Answer

Luc Boiron I'm pretty confident in the Reno costs honestly the inspector stated about 7-8k to get the apartment ready to rent.. the additional 12-13k will be all upgrades.. it's a small kitchen and small bath so I don't see huge money going there... painting I will be doing myself with a friend (was a painter for a year) I will most likely do carpet throughout (about 800 sqft, carpet because it's a pet friendly community so I think that would work better then thick laminate.. I'm optimistic but have a good feeling about it even if I were to go an additional 5-6k I believe I could still be in the green.. like I said the past month I've seen a surge in pricing and heated competition.. yes it could be the spring/summer market but I think the prices are going even higher just based on the lack of homes and surplus of buyers

Meti Kay · Answer

Anyone?