Would You Take on This Flip? Or Too Much Work?

[Stepan Hedz]

Hey everyone, I came across an off-market property in Central Phoenix and wanted to get some thoughts. It seems like it could be a solid flip or rental, but it definitely needs some work.

Purchase price is $284,900, with a rehab estimate of around $115K and an ARV of $499,900. It’s a 2/1 main house with an attached 1/1 unit, sitting at roughly 1,800–2,000 sq. ft. (aerial measurement).

The renovation list is pretty long—roof, HVAC, windows, full interior updates, electrical, plumbing, landscaping... basically a full gut. But the location is great, and the layout could work for a flip or a rental with multiple units.

Would you take this on, or does it seem like more hassle than it’s worth? Curious to hear how you all would approach it!

[Peter Mckernan]

Selling fees (estimate), $30,000, and holding costs? How quickly can you get the work done? I would project, 6 months, so if there are holding costs $2,270 a month (not including utilities), with utilities in about $2750.00. $2750x6 months= $16,500.. Points for the loan 1-2 points, so now you are in $3,413 roughly. 

Buy: $284,900

Rehab: $115,000

Holding: $16,500 

Points: $3,413 

Selling fee: $30,000

Insurance hold: $2,000-$2,500 (maybe get back $1,000-$1500 if you close quick)

Other title/escrow purchase: $2,500

ARV: $500,000

Profit: $46,587 (9.25% approx) 

I would do the deal, especially if you get that gap for rehab closed 3-4 months and tighten up the rehab costs too ($100,000)