Flip Analysis

[Doug Simpson]

Hello all, I've currently analyzed a fix and flip, and am working on getting hard money to move forward with, but I would appreciate your thoughts on the deal.

It's a SFR, ranch, ~900 ft^2, 2 bd/1 ba, with an unfinished basement, in a desirable area in Maryland. It's a bank REO, it has sat for a while with standing water in the basement so there is surface mold throughout. Exterior needs minor work. The mold issues appear minor, so it will most likely just need new paint throughout, with a remodel in the kitchen and bathroom. I have figured the deal in a worst case scenario type situation, which would involve replacing the water heater and furnace, excavating foundation and placing drain tiles, and complete gut and rebuild upstairs. I am leaning towards a broken sump pump or busted plumbing for the water, but it is impossible to tell because basement access has been roped off due to the bottom couple of stairs falling away. My thoughts are it has been sitting long enough for the mold to move upstairs, and it were foundation related there would be more water after the heavy rains we have been receiving lately.

Now, I have a 120k spread between asking price and ARV, determined by my realtor. I had the ARV priced slightly lower, at a spread of 110k, and worst case scenario it is a spread of 90k.

Estimated rehab costs, again at worst case, total ~50000.

Exterior costs, including gutters, soffit, siding, landscaping, and concrete repais, all minor, total ~3000

Interior gut and refinish, including demo, drywall, insulation, baseboards, paint, doors, total ~10000

Replacing HVAC components ~7000

Kitchen Remodel, including appliances, cabinets, floors, and countertops, total ~9000

Bathroom remodel, including vanity, tub, floors, total ~2000

Mold Remediation in HVAC ductwork ~5000

Dewatering issues ~5000

Misc. costs and overages ~ 10000

What do you all think?  These figures would bring the house up to par with other homes in the neighborhood as far as fit and finish, and again, all worst case scenario