Is This a Good First-Time Deal?

[Kathryn Tooles]

Hello BP!

I am working on my first deal and have something really interesting on the table. Here are the specs:

2 bd/ 1 bth

1,050 sq ft

$143,000 asking price

$70,000 repairs

$300,000 ARV

This deal comes with pre-approved build plans and permits which will add square footage to make this a 3/2. It's quite a big undertaking for the first deal but knowing there are already plans drawn makes me want to consider it. We have an experienced contractor/family friend ready to tackle this. Comps are close to $300k and a property on the same block is currently being renovated (almost double the sq footage) will be listed close to $600k. Thoughts on taking this on as a newbie? Any advice?

[Jerryll Noorden]

interesting

here are my rough calcs:

You think the house needs 70K... so it needs 90K (trust me on this)

10% closing fees etc. etc.

so...

143K +90K+30K= 263K expenses not counting cost of money lending)

Your profit will be $37K

Not enough for me personally.

If it really is 70K repairs, profit is around 50K... better but not a home run deal. But not bad either.

70K repairs I would say 3 to 4 month rehab. 50K in 3 to 4 months is not very amazing for our standards.

Keep in mind... if I sound negative... that is GOOD!

You NEED to be "negative" with your numbers and if they still come out OK, you have something there.