First Flip Houston Analysis

[Account Closed]

So I just made my first verbal offer on a potential flip. Then I realized I need to get others to look at my analysis! Would you take a look at this analysis below? I based on ARV from the MLS, and also a friend of mine recently bought a place nearby as well. Any input would be great! Thanks!

https://www.biggerpockets.com/calculators/shared/545037/e4a6852a-3567-46ed-8a3e-3af20ff76352

[Kami S.]

Hi Greg, first things first, you said you did ARV from MLS, is this based on actual sold comps and current listings? Don't forget to do DOM in your calculations. Also check the flood zone which can increase your insurance premium.

On your numbers, I think I came across this deal which I received from one of the wholesalers, here is what I see:

1.What is your exit strategy, flip or buy and hold?

2.Rehab cost, this goes back to my question number one but have you actually walked the property? "Never" trust wholesalers rehab cost, even when you come up with your rehab budget add 10-15% contingency to it, if you don't end up using it, it's the icing on the cake but if you ended up needing it then its the difference between making it or breaking it.

3.purchase closing cost seems low, I would say around $4K-$4500 specially if you are buying from well known wholesalers in town.

4.Your holding cost seems high, unless you are financing the whole purchase with hard money.  if it is hard money make sure to put enough holding period in your equation as first rehab may take longer if you don't have the right contractor in place.

5.selling closing cost should be around $4500-$5000 for the $250K

6.On agent, find one that will save you some money on percentage of commission but keep in mind you get what you pay for, don't use flat rate agents (this is just my opinion)

At the end make sure you do your numbers, also keep this in mind you can go to tons of guru classes and they will teach you how to do things in theory but until you do them in real world they worth nothing.  You took a big step to make your offer.

Let me know if I can be any help and good luck with your project.