First Flip

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Bought a 3/1 REO in a nice neighborhood in rural Maine. The market is currently enjoying an absorption rate of 3.5 months for properties in the targeted price range. (We are targeting four area codes in a growing area enjoying growth activity around military installations and other industry.) The details. Purchased with cash for $42k. Estimated rehab budget of $19000, and holding costs of $250/mo. Rehab should take 4-5 weeks. Similar properties are selling at $100k. We obtained a great inspector who validated the property condition and needed repairs. We're adding a half bath upstairs in addition to general rehab of plumbing, electrical, countertops, and landscaping. Refinishing cabinets, floors, and replacing most electrical fixtures. We have a SOW, a firm budget, and project calendar. We have contracted a cadre of licensed tradesmen we know personally, and have hired a PT carpenter to perform much of the non-licensed work. Our ARV for this 3/2 should be approximately $110,000 as suggested by our Realtor. We close tomorrow, and we expect to be relisting the property after the July 4 holiday. What do you think?

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First flip is complete and sold!  Amy, you were absolutely correct; our cost estimate was too low.  We finished over 30k in expenses, but still made a nice profit.  We are now looking for Deal #2 and #3.  Thanks for all of your comments and input!