Practicing analyzing for flip deals in Baltimore

[Angela DeBorja]

Hi all,

One thing I need to start being consistent with is analzying 3 deals a day. Our goal is to do our first flip. What is an easy systematic way to find potential deals and then run them through the BP Flip calculator? I am getting overwhelmed with all the ways to find properties with so many websites. We have not started any marketing for deals. I was just on homepath today, and it seemed pretty simple to search zip codes I'm interested in. Then I clicked on the properties in my price range, and then I send those off to a realtor to do a CMA to find a reasonable ARV for the properties. Then I could go to the BP Flip Calculator, and do my best with estimating repairs from the pictures based on what reading I have done. If the difference between the all in rehab cost and ARV is significant or in my target range for profit, accounting for surprises, commissions, carrying costs, etc., then I know it's a deal, right?

[Russell Brazil]

@Angela DeBorja now maybe adjust what I am about to suggest to your particular market...we are probably an hour away from each other, but Baltimore and DC can and do operate very differently.

So to analyze flips...the easiest way to analyze them is with properties that were flipped off the MLS..bought and sold. This will give you easy and concrete data to work with. You can see the acquisition cost and the sales price at the end. This will give you two very important data points...and if you are lucky, be able to see both the before and after pictures.

So to do that find some neighborhoods where there is a lot of flipping activity. The best neighborhoods are often the areas where there is a large price spread between the rehabbed and nonrehabbed homes. I can tell you where that is PG, MoCo, DC, Frederick, NoVa...I have an idea in Baltimore....but someone up there probably has firmer data on what areas. Then go back through the MLS (well have your agent do it), pull all the sales from the last 2 years say, and see which properties sold twice. There you will have a clear record then of what properties were flipped, and for how much.

Now as far as how much the rehab costs, and the borrowing costs...that is where you will have to do some estimating. Here is an important thing too....I know how much it costs ME to rehab a property....but my costs to rehab a property are very often higher than what a flipper who has 3 properties at once going on is going to cost. So when you do estimate, understand what your cost will be to rehab as opposed to someone elses. Over time that cost will go down if you are consistently doing it. Also for me, I can overrun a rehab budget and still have room, as I only rehab properties I can rehab as opposed to using hard money.

Anyways, hope that helps a bit and hope to see you at one of the meetups soon.