All Forum Posts by: Stan Butler

So I get a call from a wholesaler about a hot property he has just locked up in my target market. I get the address, a purchase price of $220k, a rehab estimate of $50k and an ARV of $345k. Those numbers work for my criteria, so I begin the DD process.

The property is listed on our local MLS and there are comparable sales in the neighborhood. One is especially good of a high-end renovation at $295k with similar square footage and floor plan. The highest sale is $330k for an updated home with 1,000 more square feet and a basement. Both of these sales occurred in the last 4 months.

I review the property and form my own list of rehab items and come up with $60k based on what I see.  It will, of course, be more than $60k since there are always items that you cannot see.

Doing some math I come up with a best case scenario of $285k Net Sales Price less the rehab and the purchase price and come up with basically ZERO profit.  So I call the guy back and review everything and he says its already under contract for $220k.

So I am seriously thinking that I need to revamp my current rehabbing business model.  Good deals are hard to find because there are so many people willing to do bad deals.  I think I will just start marketing crap deals and save myself a lot of time, because there appears to be plenty of buyers!!!

Im right there with @J Scott on his advice.  You are going to need a new lease to accommodate the different roommate.

It may not be the easiest way for you to do it, but its definitely the cleanest.

Thanks for putting this together @Andrew Cordle !

Count me in!

Hey @David Bateman if you come all the way from Austin then I am buying your lunch!

Count me in again!

Hey @James Park  I will take a swag at it.  Since we have no idea about deductions, exemptions or credits, lets go with $175k Taxable Income.

For Federal (using Form 1040), you would pay $36,247, which is an effective rate of 20.7%

For our state of GA (using Form 500) you would pay $10,240, which is an effective rate of 5.85%

Social Security would be capped at 6.2% of $117,000 so taxes paid is $7,254

Medicare tax would be 1.45% on all income, so tax of around $2,537

Ok, that makes perfect sense for that price point.  In just looking at the kitchen I would have guessed at least a $200k home.  Thats an awesome kitchen for a $130k home, no wonder it sold in 11 days!!  Great job!!!

 Formica?  Whats the price point of that home??

Love the back splash, we have used that same style in many rehabs.  I like the counter tops that you used.  Are they granite or quartz??  I also love the stainless appliances, but I cant bring myself to using white cabinets.

Most of the designs in that article are way too contemporary for the areas in which we rehab and flip.  I do like the island cabinets being a different color than the rest of the kitchen.  We have done that in several rehabs.

Thats awesome @Greg H.!  I have a family member that lives in Round Rock.  Maybe I should move out there since the deals are so good...