Questions about a possible Live and Flip strategy

[Karene Burnett]

Hello, 

I am fairly new to bigger pockets. I have been trying to learn as much as I can but I am wondering what is the best way to calculate a live and flip? We are in a hot market in Round Rock Texas. obviously there are a lot of unknowns with the pandemic, however houses here are in all out bidding wars within days of being on the market. We are being presented with an opportunity to purchase our neighbors 5 Bedroom, 3 bath, 3300 sq ft house for $309000 plus closing costs. They have Solar that we will be taking over the payments for but covers the electricity for the house. They are having their realtor give us a 2% kickback to put towards the solar and $10000 towards new flooring. The house needs alot of work, floors, new outside AC units, possibly a new deck, updated bathrooms and some minor other cosmetic things. The tax assessment alone is worth $320000. I have looked at comps in the area that sold that are around the same bedrooms and sq feet, but are more updated and they are selling from $450-550,000! We just refinanced our home and could rent it and probably cash flow about $500 per month. So our plan would be to move in next door and renovate the house over the next year or two and kind of use the BRRRR strategy initially or flip the home after a few years to avoid paying capital gains. There are just so many numbers and I see alot of potential. I am just worried if the market dropped where that would leave us. Thoughts??? Advice??? Looking for some wisdom please and thank you!