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Updated about 5 years ago, 10/20/2019
How to make the numbers work for an addition when flipping?
I see other investors building on to existing houses to create more spread on their flips, but I just don't understand how to make this work. I have done several flips, but never incorporated an addition. Most neighbohoods that my flips fall into were built in the 70's-80's, and there is no new construction. Can someone share an example with numbers of what a deal might look like that incorporates an addition? My typical flip looks something like this:
Purchase price: $50,000
Rehab: $25,000
Holding: $3,500
Selling costs: $$10,750
Sale price: $125,000
Price per square foot: $95
Since values in these areas aren't sky high, building on an addition looks like a break even at best for me. Any help is greatly appreciated!