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Easy formula to determine the feasibliity of a property with a potential as a fixer upper.
Establish a determined selling price after renovation with the help of your realtor (Conservative Estimate)
Subtract the following
1) The Cost of Renovation ( usually take three to five quotes from professional contractors and go with the middle rather than two extremes)
2) The Cost of Land Transfer tax
3) The Cost of Holding the property for the a specified amount of time 6-12 months( Utiliites, Taxes, Mortgage, Insurance)
4) Selling Cost( 5% of selling price
5) 10% to 15% cusion in the contractors quotes so your prepared for surprises.
6) Closing cost and Legal Fees.
In the Case of Redevelopment ( This is where the charm comes In, as this process of the flip really creates/builds value)
Account for the following
a) Architect and Engeneers's drawings/ Floor Plans/ 3 D Drawings/ HVAC drawings
b)Time delay in getting Permits with the City and costs associated with those delays