Calculating Living Flip Profit & Offer Price

[Kyle Johnson]

Hey BP Community trying to make sure I'm calculating a live in flip and max offer price appropriately. Long story short I'm military using VA loans and will be doing a living flip, rehabbing properties slightly below MV or at MV with higher ARVs while living in them for 2-3 years doing the rehabs myself. Somewhat of a house hack I guess.. Doing this until I can transition into actual buy and hold duplex/multi-families with the traditional 20-25% down. Building Capital the slow way.

My question when trying to hit a desired profit number, do I calculate it before the equity I accumulate? Meaning if living in the property for two years I would gain the equity over the two years: Loan amount - P&I(24 payments) + pay off amount = equity.

The BP calculator does not account for this so the difference in my profit margins vary greatly. If I'm shooting for 25K profit based off the BP Calculator my asking price is $XXX,XXX but once I run those numbers again with the equity I have gained through living in the home and paying down the mortgage the profit jumps significantly from the profit desired on the BP Calculator. I am calculating $0 holding cost because I'm living in the property as we rehab it.

Thanks for the feedback I'm trying to appropriately calculate my profit and offer price; the two numbers are clouding my judgement and making it very difficult to find a home that make sense in a competitive sellers market. Below is a deal I have run numbers on and the asking price is well below what the property sold for, but that offer got me the desired profit BEFORE adding in the equity I built paying down the loan. In other words the fix and flip calculator is calculating capital gains not overall profit (~$43,900 left over after all expenses at the end of 2 years). I'm losing almost every offer because I'm either calculating this wrong or I'm expecting too much on the profit margins for my family needs while investing in a living flip.

View report

*This link comes directly from our calculators, based on information input by the member who posted.