Potential First Flip!

[Michael Brown]

Hi BP!

I am currently looking at a potential house in Marlborough, MA for my first flip opportunity! It is a house built back in 1890!!!. My question is the following:

Can you guys check out a FLIP Calculator Analysis I put together (below) and let me know your thoughts? I have not been in the house yet (the open house is tomorrow 1/7/17 and 1/8/17, but I literally went through every cost in J Scotts book on Rehab Costs and assumed the worst. I was hoping to get insight/expertise from people who have flipped houses. I don't have Comp 1, Comp 2, Comp 3) that I felt were most similar (using J Scotts comp. technique). I know I didn't use sales within the last 6 months for Comp 1 and 2, but Comp 1 is literally on the same exact street (which is key because the street is just off a busy street with a bunch of businesses). It sold for $270,000 a couple years ago, and is currently worth 340K. Anyways see the "Analysis" below, and let me know what you guys think!

Here is the Zillow link to the house: House

and here is the analysis link: Analysis

Thank you guys!

Michael A. Brown, CPA

[Jessie Huffey]

Hi Michael- I'm a little confused. The list price on Zillow says 129k but your worksheet says 41k as your purchase price so I really can't tell you yay or nay based on that issue, but a couple of things to note from someone who has done flips before- don't touch the home unless you have a contractor you can trust who is ready to go and can get the project done quickly. I've heard some horror stories. Secondly, make sure you get an inspection before you are locked in as I have walked away from houses that had extreme repair costs for specific items (10k and more per issue) due to: Failing septic system, mold remediation, methamphetamine contamination, dry rot. That being said I think your 143k reno budget is a healthy one and should be fine in almost all cases. A positive is that the house has a super cute vintage feel to it with good curb appeal. Another thing that will eat into your estimated profit on the flip is taxes, so you would be netting under 30k for a whole lot of work on your part. I personally walk away if I can't make at least 50k on a project with this kind of scope, but it's your call. Finally, as a last consideration be sure to check your state's sexual offender database to make sure there are no sex offenders living in close proximity as this would kill your ability to resell at a good price.