First Flip and Need Advice

[Chris Ferren]

Hey Everyone,

So I finally got a house under contract after about 10 previous offers on houses. This is a 3bed/2bath that is 1588 sq/ft and is an REO that needs mostly cosmetic work. I have it under contract for $107,000 and have an estimated After rehab of about $175,000. From all the bids I got, it looks like it will need about $30,000 of work to really make it turn key. I've estimated about $7500 holding costs (costs to borrow the money, closing costs, holding costs). Based on my Excel spread sheet, I'm looking at profit of about $15,000.

So my problem is this: My after rehab estimate of $175k was based on the assumption that we would be able to salvage the pool. Unfortunately, it looks like the pool will not be able to be salvaged and the GC recommends filling it with sand and placing sod and re-landscaping the yard. He seems to think that the after rehab value will not change with the loss of the loss of the pool, and that it will remain at $175k. I was planning on the pool as an added bonus to help the house sell quickly. Does anyone have an opinion on the added value of the pool? Should I drop the ARV since there will be no pool now? Anyone care to share any experience if this pool is really vital for my ARV or not?

Just some quick additional info. For this particular area, the other comps of the neighborhood are mostly in the $140k - $150k range, however they are 3bed/1 bath and closer to a 1,000- 1,150 sq/ft. Most flip comps are selling around $125 sq/ft. Our house is 400-500 ft larger and with an additional bath, so I was thinking should be closer to $175k, which is around $110 sq/ft. It's one of the larger houses in the area, so it is cheaper by the sq/ft but more expensive overall.

Anyone have any advise before I move forward with sinking $50k of my own money into this. I'm currently in escrow, and will be closing within the next 25 days. If anyone sees anything wrong with my numbers/estimates or has any additional questions in order to provide any advise, please let me know. Thanks.

Chris