All Forum Posts by: Aaron Anderson

Here's a good rule of thumb/starting point:

Start with what you think it should resell for, under underestimate it. You think it should sell for 250,000, lets assume $240,000 to be safe. That is your ARV. From there, people aim for different percentages depending on how much risk you want to take. I like to aim for 75% of the ARV which would leave you at $180,000. Then subtract out all of your repairs and potential repairs. Include everything from paint, new appliances, new flooring, landscaping, roof/gutters, need HVAC updated. Calculate the flood insurance to be 5-10% of the PITI mortgage and factor that into your expenses as well. There is a good starting point for your offer price.

Now, how you get that resell value is very different.  take a small radius from them home (1-2 mi) and only look at sells in the past 6-12 months.  Hopefully this will give you a few good comps (10 minimum).  Sometime when Zillow runs the estimates they will pull comps from 3-4 years ago!  and the tax records will almost always be less than the Market Value and thats a good thing.  It means you'll only be paying taxes for a $166,000 home!  

And remember, if you put in an offer that you're not embarrassed about, you paid too much :)

Hey Darrell, I'm an agent in the area and I can confirm there are opportunities.  Depending on which part of Nashville you go, there is stuff in all price ranges, but for the most part everything seems to be hyper-inflated in my opinion.  It seems right now to be best to start in an outlier like Mount Juliet or Mufreesboro, but that all depends on your price range.  Ill shoot you a PM with my contact info.

Does anyone know of a website where I could, say, create a profile and log all the routes I've driven? I need a way to make sure I'm coo verging every road in my area without backtracking. Anything short of printing a wall sized map of my city would help.

Hey Ben, Ill shoot you a connect request and PM shortly.  I'll be able to help.

@Mary lou L.

Good thinking Mary Lou, I didn't add in anything for landscaping.  Right now it has absolutely no landscaping, that, the mismatched vinyl siding, and it being a construction site really deters away a lot of people.  There are mature tree around the lot, but nothing that really boosts the curb appeal.

As for the appliances, I estimated the cheapest Stainless Steel bundle from Sears + Tax. I could go cheaper with white or black.

UPDATE: I just got the notification that there were multiple offers. Will have more updates on 4/20 at Noon at the latest.  Thanks for everyone help!

@Jim Keller @Igor Messano @Luka Milicevic

Thank you all for your input. The lender has given more a high level overview of what to expect with the 203k loan (I'm still learning all of this myself. Specifically, there can be no repairs that force you to move out for 7 days and all repairs must be done within 6 months of the closing date. In my mind, this would be the ideal exit point. The longer I hold, the lower my ROI and this house is in such condition that we will need the whole 6 months as well. Luckily, I work from home as a RE Agent and my wife is a teacher and will be off for the summer. So, things like laying floors, painting walls, light fixtures and appliances can be done quickly. However, I wouldn't have a problem hiring a contractor to do the bathrooms and vinyl siding. That could save a lot of time and money.

I could only find 1 bank in my area that would actually finance a 203k loan. All other banks said they stopped because they were too risky.  I'll see what works needs to be done by a contractor.

Hey Luka! I changed up my numbers a little since I posted this.  I did add a couple hundred to the bath/shower, I added in $2,000 for Surprises (which is above) and I added in a grand total of +10% of the repair costs to give a little breathing room.  I also added in $8,000 for new vinyl siding.  This left me with Total Repair Costs of about $22,000.

The offer is in! I put an offer for $85,000. Add in $22,000 for repairs and $2,000 for buying costs, that leaves me at $109,000 totally invested. The property comps for $143,000 which is adequate for my first flip. Also, with the 203k loan, some of these (estimating $11,000) or these repairs will be added into the loan, so I'm hoping for an even higher ROI.

All the while, I plan on renting my primary residence.

I have been told by the listing agent that 99% of lender won't finance this deal.  She also said there have been 40 showings in the 2 days its been listed and nearly all of the feedback has either been "Looking for something more Move-in ready" or "Can't find full cash".  If the numbers seems right and profitable, I'm not shy of dropping my ego and asking the people I need to ask.  Just need to make sure I'm positive first.

Hey everyone! My wife and I have been looking for a new Primary Residence to do a live and flip over the course of 1-2 years (Don't have the cash to flip super quickly).  A foreclosure has come up that I have run the numbers for and, for the good of the BP community, I'm sharing my personal analysis and welcoming any reality checks or past experiences to see how accurate this is.

To start, this home is a total blank slate: No floors, no paint, bathrooms need new showers, kitchen needs appliances. Structure seems solid and there are no obvious irreversible repairs.

Here are the details:

1526 Sq Ft.  -  2/2 with 4 rooms total

4 Acre Lot 30min from Murfreesboro and Franklin, 45 min to Nashville

I've run 4 different Market Analyses and this is what I'm come up with:

I'm not factoring in ANY appreciation.

From this deal, I am aiming for 75% ARV, which gives me $107,946 as the total amount I want to put into this deal. Below are the potential repairs and additions.

First off, did I do these number right?  Did I factor in all of the needed repairs and expenses?  Any and all advice is welcome!

Thanks a ton!