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NotARageComic t1_j9cyklp wrote

I toured a 3 bed 1 bathroom flip house a year ago in Madison park area that was listed for $119,000. It was a fire rehab, so I assume they listed 30% to 50% or so above their total investment. I would wager $70,000 is minimum needed to do a proper gut and rebuild. But idk.

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DecayableBrick t1_j9dkmvg wrote

60k for a rehab that involves a kitchen, 2 bathrooms floors, electrical, new HVAC and ducting and all the usual plumbing etc but nothing structural. Rehabs where you have a brick shell and need to frame are 120k+ easily. Underpinning adds another 20k+ to the budget. The fire may have been contained to a particular area of the house or they may have received nonprofit funding. These are all trade prices and assuming you have the connections to not get ripped off by a retail GC.

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DoNotWeepAtMyGrave t1_j9eki1n wrote

I’d say it’s closer to $90-100k. There isn’t much of a profit margin on these row houses, which is why they’re still vacant.

Did that one sell for $119k? That’s the other problem.

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NotARageComic t1_j9g0125 wrote

I think it went $114 but I can’t remember.

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DoNotWeepAtMyGrave t1_j9g10a3 wrote

Yeah, anything over a 10% return in real estate is good, but 30-50% returns aren’t realistic. $114k is maybe 15% profit.

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NotARageComic t1_j9g13s6 wrote

Dang! Good to know.

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DoNotWeepAtMyGrave t1_j9g2olh wrote

Yeah man. If it was that easy to make a 50% return, everyone would be doing it. Many of these projects either fail, or barely break even. Most would be thrilled at a 15-20% return. I don’t flip, I BRR (Buy, Rent, and Refinance) and I make higher profits but also have higher carrying costs. On most of my properties I make about a 10-15% rental return, but the properties increase in value over time as well.

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yyyyy25ui t1_j9iww0q wrote

A lot of people that flip houses aim for 20%, it’s hard to keep it at that, but that’s usually the aim.

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