Short-Term Flip With Little Meat on the Bone??

[Sheldon Alex]

Hey everyone. Here's a scenario I reviewed a couple of months ago where the borrower purchased a deal at $200,000 but only had an ARV of $280,000. However, the borrower projected a $21,000 light rehab job.

The lender would receive nearly $12,000; after all other expenses, the projected net profit is less than $20,000 for the borrower.

To me, this is one of those short-term deals where the actual rehab costs need to closely align with the borrower's estimates, while the execution of the project from beginning to end would require little to no problems or delays for everyone to earn a decent check. What do you think?