Reality Check

@brrr_beth

Equity 147·Posted 4h ago

I'm seeeing a lot of fix-and-flip investors sharing project breakdowns, but I thiink it's time for a reality check. The numbers oftne don't add up, and holding costs are frequently underestimated. In my experience, a thorough analysis of local market trends and rehab scope is essential to avoiding costly surprises. For instance, a recent project in Louisville had a purchase price of $120k, rehab costs of $30k, and holding costs of $10k. The ARV was $180k, but the projected net was only $20k due to unexpected delays and repairs. Don't get caught up in the hype – carefully consider all the factors before making a move.

1 comment

@flipped_out·4h ago

I've seen similar projects go sideways due to underestimated holding costs. On a recent commercila deal I was analyzing, the vacancy assumption was 5%, but I think that's overly optimistic. What's the CAM reconciliation process like for this property, and what kind of tenant credit are we looking at? In my experience, a 10% vacancy rate is more ralistic, and that can significantly impact the bottom line. For instance, if we're looking at a $180k ARV, a 5% differenec in vacancy rate can translate to a $9k difference in net operating income. Let's take a closer look at the numbers and see if they really add up.

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