A Second Opinion to Help a Newbie Analyze My First Flip

[AJay Williams]

Hello BP,

I am looking at a deal right now and I would like a few more opinions.  The house I'm looking at is a 3/2 in a good neighborhood in Florida, about five minutes from the water. It was built in 1970 but from pictures it looks like a rehabber updated it sometime recently. I am concerned however because it has some fire damage and the bank will not let me in to see it because of the apparent risk from the damage. but from pictures it appears to be mostly unscathed. So assuming that the damage is not severe I'd like to run the numbers by the illustrious BP Nation!

Purchase price is $69900, the comps in the area range from 140k to 190k 

I plan on using a HML for 70% ARV(105k) leaving me 35k for holding costs and renovation. I used the Flip Calculator and if it took 120 days to close for a Sale price of 150k I would make about 17k is that a good investment? And as a follow up: How can I get in touch with a Hard money lender? the online apps I filled out only added me to their email list and I have yet to talk to anyone about procuring financing. 

Thank you for your time!

AJay

[Aaron Montague]

@AJay Williams 

Lots of great posts here on BP about partnering, but the bottom line is "show me the money!"

I'm assuming you are a rookie.  Which isn't a bad thing, you just need to do more work to show investors that you are worth risking 100k of their money on.

Details, details, details. Narrow that ARV down. 10k MAX spread at those numbers. Put up comps that are physically close to the property that prove your ARV. 3 in the last 3 months in a minimum.

Fire damage screams expensive rehab to me.  You need to know exactly what damage was done, take lots of pictures and know which structural components need to be rebuilt.  

Fire damage sounds like at least 25k alone.  Most likely happened in the kitchen, took out a wall and at least 1/2 the roof.  So new kitchen 7-12k, new wall 2-4k, new roof supports 3-5k and new roof 5-7k.  Now maybe I'm completely wrong and it was just a chimney fire that make some ugly scorch marks on the spanish tile roof that can be wiped off.  (replace chimney liner $1400)  Those are the details that your investors are going to want.

Get all of those numbers.  Get into the house.  Take TONS of pictures.  Get at least 3 rehab quotes from local, licensed contractors (your family members are great, as long as they are licensed and insured) and post a complete strategy here on BP with exactly how much your estimate everything is going to cost.

If you have cash of your own to put up, good.  Obviously you don't have 105k in the bank or you'd already own the place.  But if you are putting up 10k of your own money you look much more likable than someone looking for 100% financing.

Go forth, put together a great renovation and do the community proud.  Make money for one investor and the herd will find you :)