High ARV Flips in Houston

[Kevin Itima]

A good amount of my 350,000+ 70% deals with fairly low days on market are getting passed up. I'd like to get some feedback from my investors and agents with investor clients about their experience with successful/unsuccessful high ARV flips. There's a good deal of inventory to go around and far less competition, what's the word out in the field!

[Jonathan Williams]

@Judson Heartsill, nothing too complicated really. I pull a great deal of comps and know my local market pretty well to account for the different variables at play. Then based on how variable the sales price might be (e.g. 10% lowside to 10% upside), I then compare that to my own idea of rehab budget variance (e.g. old abandoned house...I could have to fumigate for termites, the project could take longer and thus more holding cost, etc....I could come under by -10%, but I could go over by +20%). Then just build a matrix function in excel like this:

So the middle orange number is my target profit, and surrounding numbers show sensitivity of that profit to ARV and rehab/holding cost budget.

Oh, and I like to apply conditional formatting that turns red at or below zero profit to really give myself a scare if I'm trying to push a skinny deal :)

As for exterior/landscape, yeah just look to your right and left on that one. Decide what exterior stuff can show up on an inspection and address those proactively. Aesthetically, it is to each his own. But you have to know the expectation of the average buyer for your product in your localized area, and just do your best.