Great Deal Alert
I receive emails and texts almost every day from people touting great ‘flip’ opportunities that they either want me to buy or find a buyer for. When I do a deep dive I almost routinely find out these “great flip opportunities” are not great at all. Either they have grossly misrepresented what the back end value is really going to be, or they have grossly misrepresented how much it is going to cost to get it there, or both. All of which is to say, I actually have a great flip opportunity!
When I tout a great flip opportunity, there’s two things I don’t do – I don’t misrepresent the back end value and I don’t misrepresent the amount of money it is going to cost to get it there. So what is this great flip deal anyway??
It is a property in prime Mt Washington (that would be the part of Mt Washington that has the great and highly sought after elementary school.) It is, of course, a fixer. It is neither a mild fixer nor a major fixer. It is a ‘middle of the road’ fixer. It is currently operating as a duplex, with a two bedroom unit up top and a studio underneath. Its highest and best value will be as a single family residence which, when you see it, you will understand that it will be very easy to unite the two units and make it into a 1300 sq ft two story 3 bed 2 bath unit. It has a 1 car garage and a parking pad in front of the driveway, so two car tandem parking. It has a three-tiered backyard, with steps along the left retaining wall that take you up to a really cool top tier concrete pad that has views and is ideally suited for hanging out. This pad is about 15 ft deep and 30 ft wide.
I have done a conservative comparative marketing analysis that shows that, once fixed up, the property will be worth $1.35mm. I also have fresh inspection reports for every aspect of the property (general, foundation, sewer, termite) so one does not need to wonder what work will be needed. (Spoiler alert – foundation is pretty good, sewer line to street is good, there is an issue with a retaining wall, otherwise just usual stuff.) Renovating and repairing the property will cost $350K at most, and someone who really knows what they are doing can likely make that $250K. So, let’s do the math:
If you are buying it all cash:
Back end value $1.35mm
deduct closing costs and other ancillary costs – $94K
deduct renos/repairs cost – $350K
deduct cost to purchase – $685K
PROFIT MARGIN = $221K. If you only spend $250K to fix it, then you make $321K profit.
Should take approx 9 months to get it done.
For anyone who is interested, I can provide both the comparative marketing analysis and all the reports. Call me if you want to purchase or get more info.
Ken Shapiro
818-237-6963
