Colorado Springs Real Estate Investor Association

March 20th, 2018 - Fixing & Flipping Properties

Tonights Topics

Terms

ARV = After Repair Value

70% Rule is Maximum Purchase Price = 70% x ARV - Repairs -- Find your own ##%.

Finding Deals

Realtors & MLS

Wholesalers

County Auction

Off Market - Self Marketing

Finding Money 

Profit Sharing Partners

Hard Money Lenders

Traditional Banks & Lenders 

You Make Your Money When You Buy

Know your math!!!

Do not buy above your maximum purchase price.

Running Your Numbers

Purchase Price = ARV * 78% - Repairs

Purchase Price = ARV - Acquisition Costs - Holding Costs - Selling Costs - Profit - Repairs

Acquisition Costs

• Title Company Fee
• Recording Fees
• State Tax Stamp
• Hold Open Policy
• Website Fees / Online Auctions
• Hard Money Lender Costs
  • Origination Fee
  • Processing Fees
  • Appraisal
  • Lenders Title Policy
  • Other Small Fees

Holding Costs (6 Month Minimum Recommendation)

• Property Taxes
• Insurance (Vacant Home Insurance + Builders Risk)
• Utilities
• HOA
• Loan Interest 

Selling Costs

• Realtor Fees - Don’t use discount Brokers, plan for 6%
• Seller Concessions - $3000
• Title Insurance
• Title Company Fee

Profit

• $10,000-$15,000 up to $25,000+ 

Repairs

• ~$28 / Sq Ft is a good starting point for a complete interior cosmetic rehab but does not include…
  • Roof Replacement
  • Landscaping
  • Foundation Repairs
  • Complete Plumbing, Electrical, or HVAC Replacements
• Most rehabs cost about $35,000-$45,000 on average.
• Add in 10% Extra for overages which will cover…
  • Surprises in your repair list
  • If the project takes longer than 6 months
  • If the property sells for less than anticipated
  • If all goes well then this becomes additional profit but often not all goes well.

After all the numbers are calculate you should know what your Maximum Purchase Price is. If you can get it for less than you can add that number to your profit.

Actual Numbers on 612 Hilltop Drive

Property Before & After Listings

***NOTE: The above costs do not include the Selling Costs on the property. 

Live-In-Flips & Financing These Deals 

FHA, VA, Conventional, FHA 203K, Conventional Rehab Loan

Guess Speaker - Sharon Ballinger - VIP Mortgage - 719-491-2500, sharonb@vipmtginc.com

Q&A Panel - Have Your Questions Ready

Gary Booth

Colm McCormick

Adam Rae