All Forum Posts by: Carl Manning

Lawrence,

I only work with Flips in Lancaster City at this point and everything starts with the After Repair Value (ARV).

Take your ARV and times it by your risk. In the past 70% would be a safe number but you can't find deals that safe anymore. More and more flippers are pushing 80%. The higher the number the more risk you are taking on and the less profit.

Finally minus your construction amount.  For a house in the city less than 1300 sqft I have been hitting around $46/sqft.  You can do rentals much cheaper than that.  Most old houses need more work than you would expect and managing contractors is very difficult right now so I would leave your self plenty of buffer for your first few houses.

(ARV X 0.75) - Construction budget = Offer price

Here is what my last deal looked like:

($175,000 X 0.75) - $45,000 = $86,000 To the seller

My all in price was $131,000.  That leaves $44,000 that gets divided up to Real Estate commissions, interest for borrowing the money, utilities, etc.  And you get the piece that if left.

Chris,

Congratulations!  If you turned a profit on your first one that is a success.

Do you have someone you are working with to help you set good guard rails for your self so you don't drive off a cliff?

Finding good deals and reliable contractors have been my two biggest headaches this past year.

Stock and Leader has helped me deal with some complicated situations.

Investment Info:

Single-family residence fix & flip investment in Stewartstown.

Purchase price: $105,000
Cash invested: $145,000
Sale price: $210,000

210000 is ARV. House is in the construction phase at the moment with a 40K construction budget.

How did you find this deal and how did you negotiate it?

Wholesaler - I'm on the look out for good wholesalers

How did you finance this deal?

Hard money loan

Thanks Owen for reaching out, and thank you guys for the quick responses. I've been wondering the same thing myself.