HUGE rehab needed - deal anaylsis

[Sara C.]

Hi all! Would love your wisdom on this deal (numbers below). I am considering flipping or BRRRRing through a partnership (so would be splitting the profit). My biggest hesitation is the rehab that needs to take place. It's currently in probate and the daughter of the deceased will be selling. This is a MAJOR cat lady house. The smell is so horrid I could only be in the property for a short time. So we are talking practically a gut job down to new drywall and subflooring. I've never done a reno that large and am a bit nervous about the budget and unknowns. This is a townhome in an excellent class B neighborhood outside of Atlanta. THOUGHTS??! Advice?

3/2 Townhome

PURCHASE PRICE: $100,000

TOTAL ESTIMATED RENO: $110,000

HOLDING COSTS for 6 months including HOA and realtor commissions: $27,000

TOTAL ALL IN: $237,000

ARV: $280,000

TOTAL POTENTIAL PROFIT: $43,000 / 2

[Bob Okenwa]

110k rehab for a townhouse seems a bit high, but as long as your numbers include room for overages, buying costs (if you're financing the property) and closings costs, you should be good to go. As far as the smell goes, it'll take a lot of new drywall and primer and subfloor as you already mentioned. But the spread is great if the ARV is accurate. Just make sure you plan for the unknowns. When opening walls and floors, something always pops up.