Working My First Deal....do The Numbers Make Sense...
First fix and Flip....have a few questions on the numbers.
2/2 condo
Purchase price - 238k
Active listings - 275k
needs kitchen cab's, counter, appliances, laminate flooring, paint.
Roughly 8k on materials...I will do all work, my question is...With Realtors fee's, closingg costs etc.......how can Iook at this REALISTICALLY and say....ok...I should make X. The market where this is located is on the upswing....It might go for 280k in 2 mos. (when the work is done) I appreciate your replies, thanks!!
Dan
first off, are you paying all closing costs on the purchase?
second, if you are buying through a realtor, the commission is not really your problem, its the sellers. And if they've already agreed to that price, don't even worry about it.
third, I would sell it by owner. Try advertising it in your local papers, for a little under what similar condo's sell for, and you'll still make more, since you won't be paying commission. If you need help selling by owner, there's plenty of help on this site...
Other than that, if your numbers are correct, looks like a nice first deal to me.
Hey,
An active listing price is a useless number...you need to know what a property SELLS for, not list price.
Using the $275k number:
$275k ARV
- $238k Purchase Price
- $ 14k RE Commission
- $ 8k Repairs
- $ 5k Holding Costs
- $ 4k Closing Costs
= $ 6k Profit
It seems very light to me.
Take the "standard formula": ARV x 75% -repairs and you get roughly $200k.
Thanks for all the responses. Bruce...I like your formula...seems pretty standard and helpful. I am working with a hungry Realtor....want to work a deal with him on commish but don't know what is appropriate. Also...can I FSBO and bring in my Realtor to handle all paperwork?? Thanks again.
Dan
You can do that. Maybe you could throw your realtor a bone or two.
Best Riches,
Jeff Adam
_________________
"The only place success comes before work
is in the dictionary."[ Edited by JeffreyAdam on Date 08/03/2004 ]
Thanks Kenmax.....I am doing the pushing!! He know's I have my "investor hat" on and it has to make sense...I am not emotional about the property. If the numbers don't work...no deal.
Dan
you have the right attitude. it's what you need when dealing with agressive agents. good luck.kenmax
Bruce is right on the money, there is no cash to be had on this deal. IMO you need to make at least a 20% return on your money and you are looking at less than a 2% return. Run from this one.