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Updated about 5 years ago, 10/20/2019

User Stats

196
Posts
70
Votes
Austin Works
  • Investor
  • West Monroe, LA
70
Votes |
196
Posts

How to make the numbers work for an addition when flipping?

Austin Works
  • Investor
  • West Monroe, LA
Posted

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!

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