First Flip

[Doug Simpson]

Hello all, I'm investigating my first flip deal and want to get your input, apologies for the long post in advance.  I've been researching and gaining knowledge for quite a while, both online and in-person at local REIAs, and am finally trying to move forward with my first deal.  I was focusing on buy and hold strategies initially, but then found this deal I think is too good to pass up on.

This is a SFR in Cecil County, MD, that needs a fairly significant amount of rehab. The roof started leaking at one point in a back corner of the house and was let go, so both floors directly under the leak, as well as the whole roof in that portion, need to be completely redone. This includes the kitchen and bathroom. The house is structurally sound. The rest of the house needs floors and doors, patch and paint, new windows, some new siding, new gutters, new plumbing, some new wiring, and extensive yardwork and cleanup (for very little yard).

I know this goes against conventional wisdom, but I'm planning on doing all of the work myself.  I'm in no rush to get done, and have the necessary skills to finish professionally, and actually enjoy this kind of work so it will be just another project to work on in my free time, albeit one that makes me money.  I work a full time job that takes up 60 hrs a week, so I'll have some nights and all weekends available.

House is for sale for 15K, I'm going to offer 10, and justify the difference with costs for title search and lawyer (FSBO). A quick walkthrough gut estimate put total rehab cost around 80-90 (my father ran a remodeling and development company while I was growing up, so I have a half decent idea of SOW and costs). My research showed comps in the 175-200K range, I'm waiting back on my realtor for her list, but her gut instinct was 160-180.

I'm planning on going back Wednesday and spend some time nailing down a real rehab cost to make sure my numbers aren't too far off.  I'm calling the city tomorrow to question permits (there's some speculation it might be a historical building and therefore stringent to stricter rebuild guidelines.)  Also, looking into if structural surveys are required, and what the certificate of occupancy rules looks like.  After getting my real rehab numbers (including holding costs) and comps, I'm planning on running a title search, then making my offer, if he accepts I will contact a real estate lawyer at that point.

I do have some worries about selling the property down the line, it's a small town so houses aren't sold frequently, and one of the neighboring properties has been abandoned for quite some time.  This is a slowly up and coming area however, so hopefully these problems go away.

The current owner does commercial rehab in NY, and bought this place to rebuild and use as a summer home, but with the market coming back says he has been too busy to make it down this far and actually do any work on it.

To sum up, lots of work left to be done, and feeling a little nervous about all of it.  

Thoughts?