Read J Scott's book on flipping - am I thinking along the right lines now with this property?

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Hi Jeremy, I would consider timing as part of your buying strategy. If you buy this house, and it takes a few months to close and rehab, you're getting dangerously close to the holiday season. That generally means fewer people looking or wanting to move in winter, and it also can mean some bigger price concessions.On the other hand, if the house continues to sit a few more months, you may have better negotiating power with the seller for the same reasons.In my humble opinion, flippers and even many contractors are notorious for underestimating how long it takes to complete a project. They also gloss over related holding costs and delays. Winter months in MN can be especially cruel - high utility bills, blizzards, weather delays, etc.I wouldn't hesitate to make a low offer to start the negotiation, but I would talk with your agent about a selling timeframe and expected days on market (DOM). If you can wait a few months as a buyer (buy in winter), you might find less competition and time your own sale closer to the spring market.

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Jeremy, Many times good flip homes sit on the market as most buyers want a turn key home that looks pretty. Investors may already be involved in many projects and/or not liquid to take on another till one sells. If the comps support it, then it should work. out. Suggestion : Get the property under contract with a a 10 or 14 day inspection clause. Send in a capable contractor to evaluate your rehab and make sure there aren't any major problems. If the numbers work, line up your financing and pull the trigger. Risk not gain not. Cant steal 2nd base with one foot on first. :)Best of luck in all your ventures.

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Always subscribe to the rules of logic before all. Don't lose yourself within the numbers. 1. why is this house priced this way, and why hasn't anybody already done what you're trying to do?....plenty of people in your area flipping houses I'm sure2. sounds like you have some competition, what makes your home better...potentially?From looking at your numbers....margins aren't strong here and you could easily go from black to red working so tight. I would move on if I were you....unless you can really beat the buy price down significantly

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Thanks for that, the timing suggestion is definitely something I hadn't considered. Doesn't matter much, though, the house was already sold and I didn't even know it.

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I really like the caution note on timing. And yes with flipping, controlling the rehab costs is very critical. Make sure you have a fixed price SOW and stick to it

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Thanks J, your books have been tremendously helpful and informative for me. I'm actually heading out to look at the property right now, just give it a quick scope, check out the neighborhood, etc.If all looks good, I'm going to put in an offer and see if they'd be willing to go down that much. If they will, I have a friend who is a general handyman that I'll walk through with it, as well as one or two General Contractors, get some ideas on cost, and see if the numbers work.

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A few thoughts:- If you can get the property for $82K, put $25K into it, having fixed costs of $25K and can resell it for $155K, then yes, your profit will be in the $23K range.- For a property in this resale range, I think $25K fixed costs is a good, conservative number. So, you're likely good there.- Based on the comps at $159K and $163K, the $155K *may* be a good number. It would be good to know what the difference was between the two that sold and the two that aren't currently sold that are around the same price. Once you figure out the difference between these properties, figure out if yours is more like the two that sold in that price range or more like the two that are sitting in that price range.- Better yet, find a good, local real estate agent to help you determine resale value, so you can be confident of the ARV. In fact, you can probably get an agent to help you for free if you promise to relist the house with her when you're done (make sure you'll really be willing to do that).- As for the rehab costs, there's no way to know if 25K is reasonable or not without more information. If it's just a cosmetic renovation, that's probably a reasonable number in many areas. But, if you have to replace the roof, HVAC, upgrade electrical or plumbing, etc., that number may be low. You'll need more information before you can get a realistic rehab number.My recommendation would be to put together an SOW and use that to create a rehab estimate (or post it here if you want input). Then work with a great agent to determine ARV.

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Jeremy,That's great advice from Anthony to nail down your rehab costs.The first thing I would do is write down all of your numbers. Rehab, holding costs, and ARV.In a similar vein, you can walk the house with a couple agents and other investors in your network. Ask them what appliances, fixtures and finishes buyers are looking for, and you can nail down a good ARV.Now you have your own numbers you came up with and all of the numbers your professionals gave you. Even if it turns out to be a bad deal, you have learned a ton about all of your numbers in that market. Even if you lose your $1,000 earnest money, I would consider that a cheap lesson.Good Luck.Jake

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Anthony,thanks a lot for the motivational words! I'm going to try and come up with a better system for finding comps today. If I can find a few houses in the 160k range that match it (I'm not sure I trust the site that I found the first comps on), I'm going to throw an offer at the property and get in a gc like you recommended.