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Updated 1 day ago on . Most recent reply

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Kristen Franks
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[Calc Review] Help me analyze this deal for hard money to do the buy and flip or BRRR

Kristen Franks
Posted

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*This link comes directly from our calculators, based on information input by the member who posted.

New to investing an have limited cash 5k-10k to get started. I am looking at this flip in a small suburb east of Indianapolis. It is listed as 2 bed 1 bath, but has 1396 sq ft and is on Zillow listed at 140K, but been on the market 98 days so I would plan to go in low. I am thinking of using the bonus room in the listing as another bed/bath or possibly making the attached garage into a primary with en suite. It sits on an acre so plenty of room to build a garage if that fits the neighborhood profile. I would need hard money to purchase and rehab and then could either sell at the ARV $340K conservatively, or rent and BRRR once it has a year of rental history to get a DSCR. I wonder if I could just go straight to a DSCR since it has already been a rental and this would also mean not as big of a rehab to get rent ready. I ultimately plan to have a large buy and hold portfolio, but need some flips or BRRR to build capitol to keep the first few deals going. How do I find lenders to begin this conversation? Without a contract will a hard money lender even discuss options?

  • Kristen Franks
  • Most Popular Reply

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    Patrick Roberts
    #1 Private Lending & Conventional Mortgage Advice Contributor
    • Lender
    • Charleston, SC
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    Patrick Roberts
    #1 Private Lending & Conventional Mortgage Advice Contributor
    • Lender
    • Charleston, SC
    Replied

    Not enough capital. You'll spend all of that on closing costs alone, leaving you 0 liquidity for the rehab.

    Another thing - dont get anchored to the list price. Determine the appropriate price based on ARVs, rehab and carry costs, the value of your time and effort, and the risk youre going to take. What the seller listed it for is irrelevant. 

    Just at a glance, I would also challenge the idea that a property listed for $140k and only needing a light rehab has an ARV of $340k and has been sitting for 3 months. Doesnt pass the smell test.

    • Patrick Roberts

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