I am looking to bid at an auction for a potential fix and flip. This is going to be my first deal. After looking at the numbers and making this post my instincts say bid lower (35k) and be prepared to be out bit. At 40K bid it does not seem to be worth it. There is a chance the property could pull a higher ARV and sell quickly but I am not sure if those assumptions are safe to make. The property is located in Muncie, IN. Small simi rural market. (60 - 70K population) Our market is very low on inventory. Especially on quality mid priced homes.
The subject property has (2) 100 amp electric breaker panels; newer gas hot water heater; newer gas forced air furnace; newer central air; newer front entry door and storm door; roof is in good condition joists and rafters look good no signs of water leaks, foundation is good.
Its about 1200 sq ft ranch 3 bd 1 bath. I plan to do interior paint and replace carpet with plank vinyl through out, change bathtub, replace dated vanity with simple but nice vanity, paint kitchen cabinets and replace counter top and sink. I am estimating 11k in repair cost. I will do as most of the work with a friend.
ARV is 75K (80K is about max for a 3x1 in this neighborhood)
- Max bid of 40K
- $4K Downpayment
- $4K Closing costs
- $52K Hard money for purhcase and rehab
- $7500 for selling cost
- Approx $3000 for holding cost ($730/month for 4 months)
- Taxes - $75
- Insurance - $67
- Utilities $155
-Int only $433
- Net profit $6,375
- ROI - 9.29
Thoughts/Feedback are most appreciated.
