Do you expect to list a house at $250,000 after $30,000 in repairs?
Following the 70% rule, your offer should clock in at $145,000 or less (250,000 x 0.70 – 30,000).
(The 70% rule says you should only offer 70% of your expected after-repair value. It’s a long-held investment formula that keeps you from overbidding and safeguards your returns.)
Step 1 – Pre-Demolition – Any Main Structural/Safety concerns such as Interior Framing, Support Beams needs to be repaired.
Step- 2– Demolition- Need to remove any garbage in garage house, and remove and replace anything that is not structurally sound or wanted in a dumpster or trash can.
Step 3 – Plumbing/Electric/Sewer/Mechanicals – Get an estimate for any Plumbing, Electrical, Sewer, Mechanicals (Furnace, Water heater, AC) work needed and get and estimate on Sewer flush
Step 4 – Walls/Paint– Get an estimate on Drywall (Material and Labor) and Paint or DIY
Step 5– Fixtures – Install all fixtures Kitchen Cabinets, Sink, Bathroom Tub, Toilet, sink, Tile, Switches, Outlets, Ceiling Fans, Lighting etc..
Step 6 – Flooring – install whatever mix of flooring that you want to install in the house get estimates
Step 7 – Finishing – Any Miscellaneous things that are needed to be installed or repaired anything that needs to be touched up any exterior work Roofing, Siding, Gutters, Garage, Landscaping.
House Flipping Formula
1. Get a Good Team of Lawyers, Accountants, Contractors And Real Estate Agents etc..
2. Find Locations that are flip ready (Not All real estate locations are flip ready), some are rental locations or Destitute (Meaning it’s hard to even collect rent due to economic circumstances and other factors)
3. Buy right to make money before you purchase basically (Before you purchase determine if you can make a profit on the property and determine if it’s even worth the time and money)
4. Fix (For Competitiveness and For Resell Value or Bare Minimum if you are renting the house out)
5. Sale (For Maximize Profits and Quick Sale in mind)
F Grade – Structure is in Very poor condition in need of complete reconstruction or Tear down, House is also needs to be completely gutted to bear studs. Reconstruction costs maybe more than the value of the property (Usually Fire damaged, Heavy black mold, Termite damage, damaged house structuring or etc.), House may have been uninhabited for 3-5 years
Repair costs -$30k $50k+
D Grade-Structure is in poor condition reconstruction is needed to completely restore house to be habitable and up to code, House also needs to be completely gutted to bear studs, Reconstruction costs can exceed more than the value of the property (Usually Fire damaged, Heavy black mold, Termite damage, damaged house structuring or etc.), House may have been uninhabited for 1-3 years
Repair costs -$20k $30k+
C Grade– Structure is in Fair condition house may need major or minor rehabbing to restore house to be habitable and up to code, a major cleanout may be needed before rehabbing. The median costs for rehab should net a decent profit for investor or equity for buyer, (Typically may need New Drywall, Kitchen, bathroom, Flooring, Fixtures, Painting, Appliances and may need rehab on Exterior ie. Roof, Siding, Masonry, and Tuck pointing for Brick structures) House may have been uninhabited for 0.9-1 years
Repair costs -$10k $20k+
B Grade– Structure is in decent condition minor rehabbing may be needed to get property habitable and up to code, No major defects might need some cleanout. Depending on what the investment costs and location of property this type of property maybe the best deal for all parties involved due to condition of property and the comps in the area. (Typically may need Painting, Flooring, Fixtures, Appliances and may need minor rehab on Exterior ie. Roof, Siding, Masonry, and Tuck pointing for Brick structures) House may have been uninhabited for 6-9 Months
Repair costs -$10k $5k+
A Grade– Structure is in good condition minor cleaning may be needed No major defects might need some cleanout. The investment costs are typically higher depending on the location of property, this type of property maybe the best deal for all parties involved due to condition of property and the comps in the area. (Typically may need Painting, Flooring, Fixtures, Appliances) House may have been uninhabited for 0-6 Months
Repair costs -$0k $5k+
