First Time Flip - Trial By Fire Gut Rehab

[Mike Rodack]

We're considering attempting a flip of a REO with fire damage. Water damage too since the roof is open and has been for sometime. We assume a complete gut of the 2nd floor, the attic/3rd and full roof replacement.

We are going inside tomorrow morning, so I'll have a better idea of the 1st floor damage.

I'm assuming:
-Completely new roof framing and roof
-Replacing some portion of framing on the second floor (TBD after looking at it)
-Replacing some portion of framing on the first floor
-Complete gut rehab of bathroom
-Adding a bathroom since it's a 4/1 and I think a 3/2 would go much quicker
-Gut kitchen rehab
-Replace all windows
-Replace HVAC
-Repair siding. It looks like the siding was not damaged too much, but may be easier to replace
-New front door
-Rewire the house

The only experience we have is basically a very slow flip of our first house. We have redone a bathroom down to the studs and I rewired nearly the whole house, plus lots of plumbing work. I think we would only get this property if we can have it for 5k or less, and I'm not completely terrified by it once I see it in person.

Comps on recent sales in the neighborhood within a couple blocks would put ARV at ~105-110, rent conservatively at ~750-800. We intend to rehab to a level for sale and rent it if needed for a bit.

Our thought is that we don't need to make much on this first one, and this would be a near worst- case flip. Lots of learning experience, and if we can pull this off, then we should be able to do less intensive flips without hesitation.

The question is; Is this a good idea, a bad idea, or a terrible idea?

[Charlie DiLisio]

Sounds to me that you would be better to buy it and tear it down. Way too much work for an ARV of 105k. You will most likely have to have mold remediation, complete electrical, major plumbing and drywall replacement, etc. Just my two cents. Way better deals than that around with much less risk for a small if any reward. Good luck with whatever you decide.