First Flip Deal Need Help Finding a Comfortable ARV

First Flip Deal Need Help Finding a Comfortable ARV

West Palm Beach, FL · Member since 2015 · 57 posts · 16 votes

Hello, All 

I found a great potential deal in West Palm Beach that I am looking to renovate as my first full fledged flip. However the property has been pretty difficult to comp with only two slightly comparable properties to go on.  Here are the specs 3/2 @ 3,214 CBS Home sitting on an Acre lot in a quiet area. 

Now the problem I am facing here is that it's classified as a 3/2 this area is about 1,595 sqft and here is where it gets interesting there is also additional 1,618 sqft of space that includes an additional kitchen and 2BR and 1BA with it's own separate entrance, the county website includes the additional space as a semi finished space but not the bedrooms and bathroom so it's basically seen as a large space 

The only similar comps are a 3/2 @ 1,530 sqft which sold for $305,000 on an acre lot and a 5BR/4BA with a pool @ 3,170 sqft which sold for $490,000 where I am getting confused is should I assume the property as 3/2 since the county only sees it as a 3/2 or a 5BR/3BA because thats what's there.

I do have a few days to decide but I am looking to either bring in a partner or a hard money lender on this deal so if anyone has any knowledge on how to attack this one I would greatly appreciate it 

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  • Investor · Royal Palm Beach, FL · Member since 2013 · 162 posts · 67 votes
    10y

    I have always been told that if you can't comp it, don't buy it.  Would love to hear from others.  Obviously, unless the numbers are just so overwhelming good at the low ball offer then you can get it appraised later :-)

  • West Palm Beach, FL · Member since 2014 · 41 posts · 25 votes
    10y

    Were permits and inspections done on the additional space?

    I'm assuming it was covered outdoor space when the home was built and has been finished out by a previous owner. 

    To count as living SF it has to be heated and cooled...and permitted.

  • West Palm Beach, FL · Member since 2015 · 57 posts · 16 votes
    10y

    There hasn't any permits to prove that the additional bedrooms and bathroom was permitted so I am assuming that it's not so I can basically look at as a 1,596 sqft home instead of a 3,214 sqft home where I am getting confused is that the city has counted as a semi finished base area the additional sqft is heated and cooled but I don't think its permitted as far as bedrooms and the bathroom additions 

  • Royal Palm Beach, FL · Member since 2016 · 127 posts · 44 votes
    10y

    Depending the price, I would buy a 3/2 with 1595Sq ft. then have that space permitted so you can have a 5/3 w 3214Sq ft. That is of course if it doesn't have open violations for that space and it was built to code. 

    So basically you buy based on the comps for $305k, then sell at the $490k level. You may however have a longer hold time while waiting for the permit so, if you go hard money, factor those interest payments into your cost.

  • West Palm Beach, FL · Member since 2015 · 57 posts · 16 votes
    10y

    Yes I was thinking along those lines as well thanks I appreciate it 

  • West Palm Beach, FL · Member since 2015 · 8 posts · 0 votes
    10y

    Be cautious with permits and Code.  My father works for Palm Beach County Building/Code department and there is always some sad story coming in to his office.

  • Investor · Lake Worth, FL · Member since 2014 · 378 posts · 184 votes
    10y

    Michael, do you have a friendly title search person who can do a quick search 4 building violations.   you can also go to the building department and they will run the property for free and give you a list of them.  with the new requirements in place since the hurricanes the code has gotten much more difficult if you have to pull permits to get the improvements qualified.  I agree to go by the legal description for your offer.  Good luck.

  • West Palm Beach, FL · Member since 2015 · 85 posts · 4 votes
    10y

    @Michael Lee what did you ever decide to do with this property? I'm interested to hear what more you found out and if you were able to put an offer in and make it work.

  • West Palm Beach, FL · Member since 2015 · 57 posts · 16 votes
    10y

    @Martha Blumel I sent the sellers an offer based on a 3BR/2BA home because there wasn't anything to justify the work was permitted I am currently waiting on their response so we will see I will keep you updated 

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