Flip caculation analysis (running the number) Atlanta

[Davon Lowery]

Working on a flx and flip in Atlanta, still need another quote from a contractor, we need a bid closer to $40k but, this is what I have so far. 

The prospect property is a 3/1 SFR in Decatur 1k SF looking to add an additional bath and SF. Hard Money lender has me pre-approved.

This is what I have so far for the numbers.

$145,000 ARV

$61,000 purchase price
$4,880 Closing cost (purchase @ 7% gross costs)
($5,000) Down payment to seller

$56,000 purchase balance X 70% -$16,800 (LTV)
$50,000 rehab budget X 90% -$5,000

$84,200 Loan Amount ($39,200+$45,000)
$2,947 origination fee (3.5% of loan amount)
$10,104 holding cost @12%
$10,150 resale closing costs (7% gross costs)
$400 Appraisal fee
$450 draw inspection fee(s) (3x)
________________________
$108,251 all in costs

$145,000
-$108,251
_________
$36,749 gross profit

$400 appraisal fee
$16,800 cash to close(12.5%)
+$5,000 cash to close (12.5%)
_________________
$22,200 out of pocket costs from us

$36,749 gross profits
-22,200 net expenses
_______
$14,549 Net profit
65% Cash on Cash return ($14,549/$22,200)

[Adam Abdel-Hafez]

Yea, I would have to agree with @J Scott. That is a large rehab for only a $15k profit. The city of Decatur is also a nightmare to deal with in regards to permits. Not sure what condition the home is in either, but a $50k reno budget seems low for a rehab including a bath addition as well as sqft addition. Again, I am not sure of your scope of work, but for a $61k purchase price, I would expect other repairs needed (cosmetic and non-cosmetic).