Deal Review (First Flip) Yeah or Neay

[Account Closed]

This came across my desk today from a wholesaler and I need second eyes on it. I would be using a HML, by the way.

3B/1B home in Houston.
Asking 30,500
ARV 90,000
Rehab Est 25,000

I drove by the neighborhood today and it's old but nice. I'll be looking at the house tomorrow so I wanted some input tonight.

A couple of things make me hesitant on this property.

First, it's a 3bed 1bath which is harder to sell after rehab and 2, the next door neighbor's house is in bad shape.

I looked at comps in the area and the ARV is accurate. The rental for the this home would be 900 to 1000 a month if I couldn't sell it right away.

Final question; after rehab, would I refinance through conventional if I had to rent instead of selling it?

Thanks in advance. Love this site, by the way.

[J Scott]

There is a HUGE difference between less than 2 baths and 2 or more baths. In my area, you can't sell a house with less than 2 baths. May be different in your area, but there is still a major distinction for most buyers.

You seem very confident about the ARV, but then you say lots of stuff that indicates you think you might not be able to sell the house. These are very contradictory things. In theory, if the $90K ARV is accurate, then a 10% discount should be able to get a quick contract.

So, if $90K is really an accurate ARV, you should be able to sell for $80-85K pretty easily. And at that resale price, you still make $10-15K, which isn't bad for a first project. Get the purchase price down a few thousand, and you have yourself a solid deal with little risk (again, assuming the ARV is solid at $90K).