Church flip confusion?

[Eric Davis]

I stalk these forums a good amount and would first like to thank everyone who continues to give great advice! I bought my first home a couple of years ago and using the knowledge on here put it on the market recently and had it under contract in under a week! So now I'm debating whether to flip a property before we leave the area in about 9 months. The property that I am looking at is completely out of my element since it isn't a personal residence.

It is smaller church that has been beaten up for years. So naturally I was interested in checking it out. It can be converted into a duplex but cannot have the footprint changed. The zoning lady that I talked to said that just putting a wall to section it off would be fine. (any red flags on this?) So anyways, here is what I'm looking at.

Asking $60,000 but I know the owner bought it for $35,000 a year and a half ago and did no work to it at all. Here is how I see the deal, please let me know if this is correct thinking for a flip.

$100,000 ARV
-$ 30,000 repairs
-$ 1,200 closing costs (purchase)
-$ 3,000 closing costs (sale)
-$ 1,200 holding costs
-$ 15,000 profit
-$ 5,000 realtor/concessions
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$44,600 Offering Price

The reason I'm picking $100,000 ARV is simply because duplexes in the same area typically are going for around $120,000 and look dated and beat up. So I just want to be conservative on the sale price so that I can sell it quick. Is there a formula to figure the asking price if you know the rental rates? Would it also hurt that price if I lived in one of the units and only rented the other one out?

[Bill Gulley]

Hi, I think you may have more due diligence to do. The lady at the zoning office is probably not the lady at building regs! It's not a simple wall, changing the use will probably require that you up date to current code. It won't be a simple wall. Do you have seperate meters and gas? I really don't think it will be a simple wall. Is the HVAC set up for two units? OK, you will probably need a fire wall between the two units and that needs to go above the roof line and building that inside of an existing building will take a prayer ana alot of money! So, since the costs probably just shot through the roof with the fire wall, the rest of the analysis is irrelevant until you find out what is needed for that plan. Good luck, Bill