Need Help With Numbers On Rehab Deal
I am working on a deal that I want to close on instead of assigning it. Since I'm new to rei and this would be my first rehab, I would appreciate if someone could look at the numbers.
Market value 350k
offer amount 260k
repairs 8500
loan cost (3 points) 8055
3 months interest payment at 12% interest 8055
inspection, insurance, closing cost, etc
7500
total cost 292,110
Am I missing any cost I should factor in.
seems like a good deal to me. 
1. Make a list of all repairs needed to be done. Overestimate the repairs.
2. Calculate 6 months holding costs for a rehab. Obviously we want to turn it around much faster but estimate long. Holding costs include: mortgage payment, property tax, utilities, & insurance.
3. Selling real estate commission. Always include this even if you don't need it. Again the name of the game is estimate high.
Then find a the middle to low end market ARV. Sure the property may be worth 250k but if you wanted to sell it within 2 weeks what would you price it at? Maybe 220?
Take $220 and subtract improvements PLUS 10%, holding cost, and realtor commission.
The difference between this number and what you can buy it for is your potential profit.
This house has a $90,000 discount because it needs $8000 worth of repair?
Are you positive about the resale amount?
The owner is selling because she is two months behind on mortgage payments and fears she is about to be foreclosed on and she's having financial trouble. She wants to get out before that happens. I factored in the mortgage owed in the offer price.
I think you have sufficient funds in there for a profit. Just run over the numbers again and again.
Good luck!
Expensive house for your first deal. If it works you will make great money. Like said before add commission and another 3 months carry at least. How is your market. Check days on market for houses in your area. Get a feel for how fast stuff is moving in that neighborhood. Big houses are slow here in Austin.
Good LUCK and HAPPY HOLIDAYS
Hope this helps some
Ted Jr