Row Home flipping in Philadelphia
Hey yall, I'm in the tri-state area, and I was wondering if anyone had any experience with row home flipping in Philadelphia? I have a couple of distressed properties in the city that I'm looking at and I was wondering if it was a good investment? If someone could get back to me, that would be greatly appreciated.
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@Quintin Green Flipping real estate, in general, is a great idea....and Philadelphia is a terrific market to do so. However, to answer your question of, "is a full gut rehab a good idea", we cannot answer based off of the information given. But there is a way to get an answer. The first thing I do when evaluating a potential deal is to run a quick CMA within .25 or .5 miles of the subject property while filtering for # of bedrooms/bathrooms, sq. ft., year built, etc... This should give you a fairly accurate idea of the potential range of value that the local market holds. Once you have this number, you need to look at your repair costs (this takes skill in construction estimating), to arrive at an estimated rehab budget. I always add on 20% for unexpected overages that often come up. You will also need to account for the holding costs and soft costs when doing this kind of a project. (closing costs to buy, cost of money during project, utilities, insurance, architectural drawings, Permitting, closing costs to sell, etc...) When you have all of these numbers, you should add them together along with your desired profit, then subtract them from your purchase price.....if the numbers work, then do a full gut rehab! If they do not, don't buy the property OR reconsider your goals if you already own the property.