Potential Deal - Need help identifying costs for analysis

[Angela P.]

Hi All!

I am looking at a potential first deal, and I would love opinions from you seasoned folks. It is a 1bd/1ba condo, 600SF, in the older part of the town, but not a bad neighborhood by any means. It is surrounded by ALL the conveniences people look to have. It is not in bad shape, just outdated, so in order to get max price I would put in some of the basics (nicer kitchen and bath, nice neutral paint, new carpet or laminate, fireplace mantle etc etc).

Outdated home comps in same complex and community are ~$40k-$45K. There is a totally rehabbed / property for sale right now at $85K but it's a 2Bd/1Ba, and it's not sold yet so I can't really rely on it right now.

Questions are:

1) Is it reasonable to assume (if the $85K rehab is accurately priced and sells at that price point) that we could sell this one after rehab for ~$70K? How much does a bedroom increase/decrease a selling price (on average).

2) If I go Hard Money route (let's just guess its "3pts / 12%" - I also have no idea what that means but people have said those as average costs in other posts) -- how do I calculate what my holding costs would be related to the financing? Assume a more than conservative estimate of 6 weeks from close to close.

3) I've never sold a home before -- but I know there are costs related to closing that need to come out of this deal -- how do I estimate what funds are needed to close? Where would I even go to get estimates on that? Getting quotes on materials and labor is easy -- go to home depots and call contractors for bids, but this area of deal analysis is blank for me.

4) Is this a good deal as a flip or a rental or neither and should I just walk away?

For my first deal I am not looking to make $20K - I want to start small with a small footprint and just really see the process A-Z, I want to make a profit of course, but even $1K-$2K at the end of this would be OK by me, just to use as a learning platform and not get in over my head.

Thanks for all of your advice in advance!

Angela