Potential First Deal! Fix n Flip

[Chris Porter]

Hello all!

A little background:

I'm currently deployed over seas, I'm actively looking for a way to make the most out of the capital that I'm accruing while I'm out here.. especially since i don't have any living expenses at all (perks of being single and deployed!). I've got a friend back home who has their Real Estate License and has expressed interest in teaming up with me to work a deal.

Asking Price: $117,000

Offer Price: $75,000

Rehab Costs: $25,000

ARV: $140,000

I did a little simple analysis on a potential flip property. I put the ARV around, what I believe, a very conservative $140k for the area based off what I saw some homes recently sold for. I added quite a bit of fluff to repairs cost as well, as I don't have much experience at all when It comes to rehabbing... I made some best guesses off what I could pull from the internet. Even with all the fluff added, and the conservative ARV, I'd be looking at about 30k profit.. that's including accounting for holding cost for up to 4 months..

What do you think??

-Down payment would be $15k.. on a conventional 20% down mortgage.

-Monthly holding cost would be ~$600

-I'm thinking I could fork up $10k for the down payment and then also pay all holding cost until it is sold..

-My Partner would chip in the remaining $5k for the down payment.. and be responsible for managing the rehab of the property.. contractors etc..

-Probably have to look at a private money lender for the $25k repair cost...

-The way I would see that working would be to pay 8-10% interest only for the 3-4 months that we borrow the money, then pay back the principle in full once the house is sold. I could pay this monthly interest myself as well. I have a few people I could possibly reach out to for this.

At the end of the day, once the property is sold for $140,000, the following will need to be paid off:

SATISFY THE MORTGAGE LOAN: 

 -$60k

ME:

 -$10k - down payment

 -$2.5k - holding cost

 -$5-7k - hard money loan interest

PARTNER:

 -$5k - down payment

PRIVATE LENDER:

 -$25k - loan

TOTAL EXPENSES: $109,500

This would leave us with a profit of over $30k to split between the 2 of us.. and this is estimating expenses and holding cost etc... on a very conservative level.

Really just putting this out there to see if there are any obvious things that i have over looked and also to gain opinions on the deal from those of you with some experience!