Posted by JT - IN on June 30, 2001 at 06:59:47:
A $25 to 30K rehab, is a big rehab, on a $ 95K ARV property. How did you arrive at these numbers? did you have a pro rehabber look this over?
Assuming your numbers are correct, you are definitely in the ball game here. As ageneral rule, you want to purchase at not more than 65% of ARV; you are at 68% if repair costs are $ 25, and at 73% if costs run 30K.
Now after adding you 5 grand to flip to a rehabber, you are further depleting the percentages.
Best to be sure that your numbers on rehab are accurate, cause that is usually the downfall of most of the deals similar to this; underestimating what repairs cost, which eats away at profits.
JT - IN