Deal Diary for Dummies: Wholesaling, Flips & Rentals #1 - Tucson, AZ - 2 beds, 1 bath

20 Replies

The Deal

Recently picked up a 2 bed 1 bath home with 902 SqFt near the University of Arizona in a great college rental area. Also, being close to downtown Tucson, it has solid potential for a family residence.

Originally picked up this house by mere chance. Driving through the neighborhood, we saw a 6"x12" FSBO sign in one of the windows and made the call. The owner no longer lived in the area and was unable to get the house rented in its current, rundown condition.

The owner wanted to get the property off his hands and asked for $62,000. The initial plan was to get him down to $55,000, but we decided it was too strong of a deal to draw out negotiations (and let other investors sneak in offers) and gave him the full $62,000 (closed April 29).

Having done a few other properties in this neighborhood, we didn’t have much trouble envisioning the remodel. The plan is to add about 1,000 SqFt and convert the home into a 4 bed 2 bath. We will have to gut and redo everything (electrical, plumbing, kitchen, baths, flooring, etc.).

The Investment

  • Purchase Price: $62,000
  • Remodel Cost: $105,000
  • Carry Time: 6 months (4 months for remodel and 2 months to list and close)
  • Finished Product: 4 bed, 2 baths - approx. 1,900 SqFt

Option 1: Flip

  • ARV: $230,000
  • Actual Sale Price: $211,000 (230,000 - 19,000 closing costs [2%] and RE commission [6%])
  • Profit: $44,000
  • Cap Rate: 26.3% (44,000 / 167,000)
  • Yearly Return: 52.6% (44,000 x [12mo/6mo])

Option 2: Rent

  • Estimated Monthly Rent: $2,100
  • Annual Rent After Expenses: $17,640 (2,100 x 12mo x 0.7)
  • Expected Return: 10.6% (17,640 / 167,000)


Before Pictures

Follow this post for regular updates and to see the finished home!

Wow, amazing risk, a lot of work -- more than I could have ever done. 

How much were your labor costs?

I did a job like that with a friend who I let live in the house and paid $10/hr. 

I live in the area and would love to have found that house!

@Raquel Baranow

We've done similar properties in the area and have confidence in this investment, but you never know what can happen.

We are able to do everything at cost with our in-house construction company, so that also helps us with our margins.

Sounds like a good deal - I think we all need one of those friends.

There are plenty to go around, it's a great time to invest in Tucson!

The remodel has begun! Next step: knocking down some walls.


@Matt carpenter

Good job man! I look up to you bro. Thats one hell of a flip. I have yet to do my first in tucson. Or anywhete els for that matter, but hopefully soon. Thanks for all this info. You really are inspiering bro.

@Christian Alcaraz

Glad you're finding it useful! Just stick with it - you'll get it.

Feel free to shoot me a message with any questions.

@Matt Carpenter

 finally a tucson flip thread!!  Ill be following this one for sure!  Any chance I can stop by one of these days and check it out?  Thanks Matt!

Good job Matt!

Hope you continue posting photos.

An after picture of a project that we recently finished to give an idea of what the finished home will look like:

@Matt Carpenter

 How's the progress on the flip going?  I still want to come check this out when I get the chance and will definitely be in touch (I have 3 young children so timing right now is a bit tough haha). 

Originally posted by @Matt Carpenter :

@Raquel Baranow

We've done similar properties in the area and have confidence in this investment, but you never know what can happen.

We are able to do everything at cost with our in-house construction company, so that also helps us with our margins.

Sounds like a good deal - I think we all need one of those friends.

There are plenty to go around, it's a great time to invest in Tucson!

 Good job with the flip.

Keep us posted @Matt Carpenter  

Did you every consider keeping it as a rental?  Some paint and some bling (light fixtures, new faucets, etc.) would make it pop and the rental pool would easily take note. 

Nice work! Hope it worked out for you!

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