I have a fix & flip opportunity in a higher end town, south of Boston.  

The demo/construction estimates came from two different contractors who =
walked the site with me and my clients.

Here's the overview - and these are NOT guarantees, but my own projections. 

Due diligence is absolutely required.

- Expensive coastal town, great schools.
- Short Sale
- Acquisition price $300K (worst case)
- Currently a 2/2
- Needs almost a full gut. Probably $60K in rehab
- ARV $400K, which doesn't make sense - unless you go to the next step, which is:

- $150K gut + addition making it a 4/3 or 4/3.5, with an attached 2 car =
garage (with bonus space above). Then ARV jumps to a very conservative =
$650K

70% rule: $650K X 0.7 = $455,000 - $150K in repair = $305,000 maximum acquisition price.  I'm told by the seller's agent that an offer of $250K should be successful.

Estimated profit calculations: Sell $650,000. Comps strongly suggest ARV of $675K. I'm basing the projections on the more conservative $650K.

Estimated Expenses:

$300K acquisition (worst case)
$4000 legal fees, closing costs, etc.
$150K - design, permit, build of addition and upgraded septic (septic currently passes inspection for a 3 BR)
Carrying costs $2500/month (hard money) for 8 months (pessimistic) = $20000
Marketing cost $32,500 (5% commission at $650K)

TOTAL EXPENSES = $506,500

PROJECTED NET PROFIT = $143,500. $-15K for miscellaneous / surprises = $128.5K net profit.

These estimates (again, NOT guarantees) are at an ARV or $650,000, which I'm confident the house will bring as a 4/3. With a little less pessimism, the comps seem to support $675K.  That brings the projected net profit to $153.5K.

I am a licensed real estate agent in Massachusetts and this is not my listing.  It is an opportunity I've uncovered because I know the local market.  Therefore, I require a signed "Investor's Buyer Broker" agreement before disclosing anything further.

That agreement states that if you buy the property, you'll buy it through me and that I'll be the listing agent for the flipped property.

- Charlie MacPherson, licensed real estate agent in Massachusetts.  Lydon Real Estate and Mortgage. 167 Washington St, Norwell MA 02061. (the preceding is a state required disclosure)