Is this a good deal?

[Ty Jenkins]

I am working on getting my first house under contract and after viewing the house im not sure if it’s a good deal or not. Here are the numbers

Arv = 200,000 to 230,000

Repairs = Total gut and rehab. My estimate was 70,000 to 80,000

Price= 70,000

Property size is 1600 sq feet if that helps.

My concern is that the repairs my cost more than my estimate. This is my first time looking at a house in such bad shape so I might be over estimating the amount of work that needs to be done. The biggest problem was there is terminate damage and needs new walls but the foundation can be saved. Do y’all think I should go for it???

Also I’m going to wholesale it so how much should I market it for?

Thx in advance

[Scott Scheel]

@Ty Jenkins It seems like a good wholesale opportunity. When taking into account rehab costs (and additional rehab costs that may come as a surprise when starting the reno) and carrying costs; it doesn't look like a good spread for a rehab project. I would take the wholesale fee and move onto another project using that profit.

[Dan H.]

I recommending getting an estimate of the repairs from someone with more experience with rehab costs.  This is possibly a General Contractor.  Depending on accurate rehab costs rather than a WAG of the rehab costs, the property could be a good wholesale, a good flip opportunity, or neither.

it is very likely that if it is a good wholesale opportunity someone considers it a good flip opportunity.  Deciding whether to wholesale or flip the RE depends on what you desire.  The flip will be more work but have more upside.   You will obtain some profit on the assignment, but the flipper will also make money on the flip.  Wholesaling it you only profit from the assignment.

I personally would only wholesale it if for some reason I did not believe I could do the flip.  Such reasons could be not enough capital, not enough time, not confident that I have the skills to succeed, etc.

Good luck

[Sam Shueh]

Assuming 1 story. Rehab at $125/sf you just blew $200K. Tear down not included. I will sell to another person.

[Mike G.]

@Ty Jenkins  wholesale this one off to someone who has more experience and grab yourself a copy (digital or hard copy) of BP's own @J Scott and read his book on Estimating rehab costs. Read it twice in fact so it sinks in. Tons of foresight and knowledge at your fingertips to make you far better equipped for the next project down the road. While your at it buy his other book the book on flipping houses, its a great read and im glad I purchased it i will be referring to the many lessons in that book as i embark on my first flip.