Hi,
I thought I'd share a little insight I have gained over my past experiences when looking to purchase a property to renovate.
First and foremost, you NEED to do your homework. If you're looking at wholesale properties - don't take for granted that the comps the wholesaler has run are completely accurate. Compare homes that have recently sold in the area with similar bedrooms/baths/square footage.
Analyze condition of the home. How much money will it take to get this property back in living condition? What is the time frame the work will take to be completed?
Run your numbers! Along with construction costs, don't forget about closing costs, realtor fees, investor interest (if applicable), taxes, utilities, etc. Always be aware that there could be hidden costs in addition to your calculations!
And finally, estimate how much profit you will make after the sale of the home. Is the flip worth your time based on the profit you will make compared to time frame? If so, submit an offer and get the process started! If not, stay patient - there will be plenty of other opportunities when the time is right.
Best of luck,
Dan
