First Flip SOLD! Here is the deal A-Z.. I use that term loosely

12 Replies

Keywords: Sacramento, Cameron Park, California, First deal, Flip

Hi BP community!

I thought I would come here to post about what I would consider "my families first flip".

A little over a year ago I began my start here on BP learning and self educating. My family and I were aiming to invest in real estate. After finding an experienced investor, through BP actually, we played hard money lender on a flip to get our feet wet. The second deal, or my first flip as I would call it, went slightly different. After joint venturing the deal we had fire the initial contractor, were more than double my rehab time, and had to scramble to find another contractor to finish. Eventually, the investor and my family parted ways and long story short we were left to sell the house and remaining profit. That is enough backstory... Here is the important part... Pictures and even better numbers!.

I apologize for not having 100% pre-rehab pictures. I believe some of them are a little ways into the rehab. The after picture were taken from the MLS. ....Lesson learned...

This house is in Cameron Park California.

*** These numbers are rounded and rough. I will be posting a detailed breakdown on a spreadsheet ***

Initial Analysis 

ARV: $485,000

Purchase Price: $355,000 ($205k Cash Down, $150k Hard Money [email protected]%)

Rehab Cost & Interest Payments: $44,000

Holding Cost, Closing Costs: $7,000

Real Estate Commission 5%: $25,000 ( I know its $24,250)

Time Frame: 8 Week Rehab (Hoped for 4 to 5 months MAX initial purchase to resale)

Potential Profit: $54,000

Cash on Cash ROI in 4-5 Months

54,000 / 249,000(205k+44k)= 21.6%

Pictures of Before** Heights Before Pictures

Now for the actual numbers. I am going to lump it together to make it easy. I will post detailed spreadsheet later.

Sales Price of $480,000

Purchase $355,000

Rehab&Interest&Holding $72,000 !!!

*Note this is where we went wrong. I learned the lesson of how important it is to have quality people on your team. I had to fire the low budget contractor after he did no work in most the time with ALL the money. Lets now start...

Time Frame A-Z: 9 months!

* I think this is also an issue due to the face we listed a 6 bedroom home originally in November. Due to the contractor circumstance.. Ripple effect =(

In the time towards the end of the flip is when the individual i found and my family parted ways.

After all is said and done ( Close, RE Fees, Repairs, Taxes, Etc)..

Total In $427,000 ish

Total Out $ 450,000 ish

Profit $23,000

Detailed spreadsheet to come. The biggest issue was rehab cost literally doubled and of course time.

After pictures here - After Pictures

I apologize that the after picture are on Zillow and their quality. Am working on a fix..

A lot of drama. A lot of unforeseen things. A TON of irreplaceable experience and lessons leaned. And most importantly, the CONFIDENCE to go forward! Nothing like in the green on your first one.

I am posting this to share my experiences. BP has taught me a lot and I have learned a lot through other posts. Even more so through others constructive criticism of those posts. With that said I hope this is another learning experience for myself and others. Please bring any and all comments!

I will be updating this post and answering questions. Please feel free.

GAME ON! 

Nice job!

5% ROI is a great return considering the timeframe and everything you went through. Always good to be in the green. I saw this was a MLS deal initially, is that where you plan on continuing to find flips? Any plans for another flip?

Originally posted by @Derek Jones :

Nice job!

5% ROI is a great return considering the timeframe and everything you went through. Always good to be in the green. I saw this was a MLS deal initially, is that where you plan on continuing to find flips? Any plans for another flip?

Thanks. I found this one through one of several agents I use when necessary. I am open to working with any and all agents if that's what you're interested in. I am open to deals anyway I can get them, MLS or not, as long as it's a win win.

When contemplating hiring a contractor check with BBB and references and thier current project go see. Also ask at pro desk at Home Depot and Lowes especially their installers. Try Angies List and become a member. I live in a small town of 40,000 people so words gets around who to trust. See a project, stop and ask the home owner if they are happy with thier contractor. Check licenses and insurance, has there been any claims against them. My experience with contractors start with in writing and pay only 1/3 up front, 1/3 better than half of the work done, last payment when they finish with no returns necessary after inspection to fix something they missed or messed up. If they ask for money to purchase material to start the job, give them reimbursement with the copy of purchase receipt when they delivery the material. I give a bonus of 5% if they finish 5 to 10 days ahead of time.  Some ideas for you.

Brennen,

Thanks for posting the details on your first flip, very educational! Finding quality contractors definitely seems to be one of the most challenging aspects of this business. Out of curiosity, how did you initially find your "low budget" contractor?   Glad to hear you made some money!

Thanks Mike for the suggestions.

I actually didn't find the contractor.  When I found and used the "experienced flipper" it was his contactor.  Long story.. another lesson ed learned. CYA.. if you aren't constantly watching and analyzing how much better are you than a guess?!

Looks pretty good.  I've seen my fair share of flips and I hate when it looks like it was done super cheap with left over materials. May want to add a professional photographer to your network.

Originally posted by @Derek Jones :

Looks pretty good.  I've seen my fair share of flips and I hate when it looks like it was done super cheap with left over materials. May want to add a professional photographer to your network.

 I think the solve would be a technically capably agent who can upload in a higher quality that an iPhone 3.. 

But I'm not sure exactly what you mean other than that.  The above bathroom is a before. My after didn't upload.

Either way,  better quality is a must have. 

Nice job Brennen. Best type of learning is from trial and error and you still made a decent profit! I'll have to do a drive by and check it out since I just listed a property on Heights as well. 

Would be glad to let you know of any deals I come across. Lets talk soon. 

This post has been removed.

Originally posted by @Kathy McBride :

Nice job Brennen. Best type of learning is from trial and error and you still made a decent profit! I'll have to do a drive by and check it out since I just listed a property on Heights as well. 

Would be glad to let you know of any deals I come across. Lets talk soon. 

 I couldn't agree more. Trial and error. And if you can error and still come out ahead... I read someone say the first is always the worst. I can only hope that's true in my case.

Would be happy to connect. Email anytime. 

[email protected]

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