[Calc Review] 203k loan live in flip and turnkey flip?

[Phil Collett]

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So a little background. I am thinking of a live in flip with this house and sell my current primary residence in the process. I ran this report by some REI at a local meetup in Riverside a few weeks ago and for a 5% margin it was not worth it. I figured that before asking and running the numbers but wanted to see how much margin they typically use. I have been going to their meetings off an over over the years.

As a live in flip, and pulling my equity from my primary to do some turnkey flips in Houston into Rentals that cashflow I figured it may be worth the effort. The Houston ones would hopefully give me:

a. positive cashflow

b. enough equity that a 10% market correction would not effect me (if and when that happens)

My primary residence was bought in 2011 at the low as a short sale with some robo signing agreement so I did not pay any closing costs. I bought for $299k in Rancho Cucamonga and the house is now worth $468k redfin, and $520k Zillow; I owe $224k @ 3.6% 30 year. So there is some equity to play with. I also have money in a roth IRA and can take $50k from a 401k loan @ 4.5%. I am finishing painting the exterior of my house (I spent 3 days and have some guys that will finish when they paint my parents house) and figure if I wanted to sell, it should not be a problem because the house is in great shape, and this is the summer family moving time market.

I know the area well as I my family has been here since 1986. The live in flip house is in a slightly less desirable area, but barely anymore as they are in the same school district of Etiwanda which is very good. I was going to do an equity share for my friend last year and this Heritage area was pretty hot and everything I looked at was going for $450k, even when they were trashed (looked at about 10 houses). So I figure $440k arv to be safe. It is a bank REO bought at auction by the bank for $355k.

So, live in flip:

$360k ish offer, about $30k in repairs probably, worth $440k ARV

Sell primary:

$480k (split the redfin/Zillow estimate) - $224k remaining loan (I will miss the low mortgage of $1650/mo)

Worth it?