Help analyzing a fix & flip

[Farrukh Amini]

Hello BP!

I'm looking to get into my first fix and flip deal but have no idea what kind of margins are considered worthy in my market. The property is in Jersey City, NJ. I'm very comfortable with this market as I've been investing here since 2014, so I know valuations of different neighborhoods and blocks fairly well.  

I've been presented with an opportunity for a quick fix and flip. Here are the numbers. Would love to get some input to see if I'm doing my estimation on timelines/costs/returns correctly or if I'm missing something:

3bed/2bath SFR with parking and big back yard on a quiet dead-end street in a C neighborhood.

Negotiated price:$250k

Rehab Costs with 10% contingency (financed):$44k

Total amount financed:$264.6k (90% LTC)

ARV:$350k (conservative, priced to sell)

Timeline estimate (with lots of cushion, I think): 6-8 wks for rehab and another 8-12 wks to sell. I'm confident the property will sell within 2 months at this price but accounting for possible issues like buyer not being able to get financing, etc. 

Purchase costs (figured about 5% of the purchase and rehab cost):$15k

Holding costs (5 months): $8.8k

Selling costs (about 6% of the sale price): $21k

Invested cash: $44.4k

Total profit:$11.1k

Post-tax (figured about 25%):$8.4k (clean profit)

ROI: 21%

Thank you in advance. 

Farrukh

[Edward Verdel]

@Eddie Egelston agree on your points, but our area trades very tightly and I feel everything in his estimates is conservative, so profits should be more. 20%+ ROI is great for our area and what most flippers target.