First Renovation Project - Sacramento, before & after pics

[Edit B.]

Wanted to provide an account of my first renovation project for anyone who is considering jumping in but lacks the experience.

Property Location: B to B+ area in Sacramento region

SFH Market at time of purchase: Hot 

Acquisition: Purchase price was $240k. I received an offer to purchase this from an agent/friend of mine who was working directly with a trust manager who wanted to sell the property asap

Renovation: Full remodel as well as light structural changes & repairs. Total cost of renovation was $50K 

Selling Price: $352K

Here's what I learned as a rookie on my first flip;

• Before purchasing anything
  • Have a very clear understanding of your market. Literally know it and feel it like its your own mood. By that I mean know the day to day feel of it- Is it warming up, is it cooling, is it staying still, are some neighborhoods doing better than others. How do you do this? Speak with agents. Are offers sitting longer? Are they moving? Whats going out there? You get the point
• When you come across something you perceive as a good deal
  • You cannot assess the value of the property and therefore price you should offer without knowing the state of it. This one is very important and maybe self explanatory. The ARV can be based on comps and a good understanding of the local market, but the current value of the property is based on all of that plus the state of the property
  • Go to the property, walk through it with a general contractor or someone who understands renovations- do not try to assess the cost of renovation yourself. You will either get lucky and think you know something, or fail at which point your bank account will remind you that you don't know anything. Once you have the renovation cost, add 10-20% to that and you may be in the accurate range. 
  • Considering the renovation, think about what you want to make here and how much your time is worth, then offer a price. IMO low-balling is a ****** way to negotiate and you should be in the ballpark
  • Get a general inspection, but more importantly a pest inspection. Trust me this is not wasted money. You can actually often use this to negotiate a better price, and you can also feel confident you're not jumping into something with major issues that you were not aware of 
• Renovation
  • Pay attention to detail and think as if you are buying this house. If you do not have a general contractor, then really pay attention to detail. Different contractors have different standards of work and you will have to be the one that catches or ensures the quality you need is there. Some of them are used to working in D areas and arent worried about clean work, but you may be. Pay attention to everything; tile line spacing, grout lines, fixtures being straight, faucets straight or aligned properly, doors closing properly- anything that catches your eyes. The little stuff being off gives the entire place a different feel and trust me buyers will feel it. 
  • Have a contract. In your contract make sure you the contractor is liable for work that was done incorrectly and caught during inspection. If you missed something there is a chance that inspection will catch it. You should not have to pay for someone that did this work to do it properly
  • Do not pay anyone in advance more than material cost plus something like 10% of work cost. You have no leverage if they take too long or are not willing to do things as agreed upon. It will be off to the courts after that and you don't have the time. 
  • Get building/reno permits- they are Cheap and in CA code inspectors will be on site within 24 hours of the request. If you decide to go without a permit remember that when sellers are placing offers, you will need to disclose that you have unpermitted work(unless you like getting sued down the line), once you disclose this they now have leverage in purchase price, repair costs, whatever... Because they can report you to the county, at which point you will have a bad time
  • This ones important- once renovation is complete, thoroughly check the work and make sure you have covered every item in inspection report. It would be good to actually have re-inspection and clear anything on the report because you can provide this to the buyer from the start. This will save your good deals.
    • Imagine this scenario; You placed the property on the market during a good time, you recieve many offers and property goes hot online. You accept the highest offer and are pretty happy about slightly under estimating your ARV. The buyer sees your pest report and finds that you have leakages in the roof. They interpret small issues(you forgot to take care of) on the report as major roof repairs and back out of the deal because they are first time buyers. You just lost a great deal, next time you are back on the market you will receive a much lower offer and have to explain why you fell out of contract, and trust me no one is going to ignore those small roof repairs you forgot about
• Other Things:
  • Thing twice about doing your own work. Chances are the quality will be low and it will take you twice the time. Its also not sustainable if you want to scale and want to become an investor
  • When picking contractors dont always pick the cheapest guy and pay attention to everything. How do they respond, do they listen, are they trying to rush you, everything matters. Filter people out when you don't feel good about working with the


Happy renovating! :)

Front Side (Before)

Front Side (During Renovation)

Front Side (During Renovation)

Front Side (during renovation, windows replaced)

Front Side (During renovation, windows and siding replaced)

After Renovation

Interior Renovation Pics

After Reno Pics: