2nd Flip... Follow along!

95 Replies

Well, I am in escrow again... YES! I finished my first flip in March. Sold quick, great $, paid off all my CC debt and cleaned house. Now I have been looking for 6 months for another project! Dear wife is PRETTY restrictive on my house profile for projects. Since we are using our HELOC for down and rehab and holding costs... she isnt down to risk too much... so we have waited for a sure thing.

I have a great buying agent... who was really cool about walking lots of houses... we offered on a few flip targets... offered on a few BRRR targets both singles and MF, and nada... spring is brutal in Nor Cal. Anything that is public gets hammered with offers in the first week. Well, patience paid off. My agent calls me and says... "we have a winner... estate house, they dont want to do ANYTHING, and want out quick.... we have it in house, you get first crack"

Usually in Norcal that means that the kids have watched flip or flop 20x and went on zillow to get a value and they are HIGH.  well this time... I about fainted.   they were right on, if not low, even for my idea of a price.  I toured it with both agents... then they say oh there are NINE kids that have to sign off, and one is  a realtor.  I am CRUSHED.  think this will likely derail any offer I put together... but the realtors say no... that they have walked them through what they are asking for.  I walk the house... it is grandma... needs everything... but 90% cosmetic... no major issues so far..

I offer them exactly what they wanted at first meeting... but kind of figured if they got an offer day 1, we would get bumped a bit... well, they came back from my 600 offer, that they wanted to NET 630k after realtors.  I said no... did my usual song and dance on issues, asbestos popcorn etc. etc. and we countered back at 620k, they countered back at 629 with 45 day escrow.  we took it.... I am walking it with my contractor and selling agent friday.... 

I will have pics and all as we go along!

I walked it with my contractor.... He agreed with my initial estimate... counseled me against moving walls...  Hard to really talk turkey with owner sitting there...  I scraped some popcorn and we got a positive asbestos test.  So that will be interesting come renegotiating.  

My town is that one where people require a whole house mold abatement if they see a spot in the shower stall...  so asbestos popcorn in 80% of the house is an issue...  we will see.

Well, this flip has gotten interesting... We are at a cross roads with the project... It pencils... but not AMAZING...  Sellers rejected our repairs counter...  so we are at our previous offer... Said they already came down to our original price by a lot of $$.. so they wouldnt come down more.  We are going to go forward and take the smaller return... and if we get lucky and Ca. keeps being ridiculous and someone over pays, this sac bunt might turn into a triple.  

The only thing that is fighting this house is the 2 story making opening up the 1st story really hard.  the kitchen is old funky and small eat in... see below...  and the stairs go right up the middle of the house, with a door closing them off...  

Well, we closed this morning.  Always something interesting.

I got into this house minute 1 of them them having it "available" due to my realtor. My agent had been working the family before the parents even died. So I was the first to see it. I entered a contract with them that day... and offered them a 60 day escrow. I would eat the EMD cost to get the deal... They said ok, thats cool, we will do 45. I didnt think they would be able to deal with the belongings etc... by then... but they said yes.

So we are in escrow, discussing lending, dates, times, etc...  and they want to move it UP a week.  to today vs. next friday... I say... "Are they going to be able to empty the house, and move the one daughter out by then?"  They say yes... I know its BS.  

well, SHOCKER... 2 weeks ago, they pop up, and say hey... the one daughter cant get her new place in time... can we rent back for a week?  I am peeved, but it doesnt affect my timeline much at all... so I agree.  We close today, and take possession next friday.

anyway... meeting with my design team tonight... and we will begin demo on the 20th...  Off and Running...

I met with my design team on friday evening... Got some really good ideas... I think this is an important aspect of a flip... get together, spend a few bucks on a cohesive idea and look for the house.  We are going with Modern farmhouse, lots of white and black, clean and bright.

Here are some demo day pics for the downstairs.  Baths, kitchen, baseboard and doors out.

Hall Bathroom gutted,

Master bath gutted.  We also took out a linen cabinet that was in the hall butting the shower... gets us a foot of shower back, in what is a SMALL master.  it is the only real downside of this house.

@Carson Wilcox Congrats on your 1st and 2nd flip! Just want to consolidate the numbers

ARV is 875k

Repair estimate is 125k

Purchase Price 629k

I'm guessing about 87k will go towards realtor fees, closing costs, holding costs, etc.

Projected profit 34k? Is that right or am I missing something?

Thank you!

You are a little strong on some areas... 

Purchase 629

ARV 840 850

Holding and realtors should be about 60k, 

and reno about 105k...  

But yes, unless my holding goes long... I should gross 40k or so...  My risk here is holding, and the project finishing in Nov.  But we will see.  I wish this house had come to me in Nov!  vs August!

@Carson Wilcox So you’re paying 629k and rehab is 105k for total of 734 to make 40..? That’s a Ton of risk isn’t it to make 40 (likelY 25-30k post taxes)?

@Carson Wilcox Thanks for filling in the gaps.

You're a massive action taker! Kudos on doing two flips in such a short amount of time.

If you have time October 18-20 check out an event in San Diego called Flip Hacking Live I think you'll get a lot out of it.

Originally posted by @Carson Wilcox :
@Caleb Heimsoth. Yep.

Unless I want to move to Ohio. This is the kind of spread I am seeing in norcal. It is tough to find deals with housing as hot as it is.

If you’ve got that kind of money from a heloc you could easily spend that on out of state rentals (not necessarily Ohio lol) and get a lot of money passively.  

I have thought about it.  I am planning on learning this "trade" by doing some local, albeight less % return flips, before I try and expand to a out of state deal.  WHen phase 2 (buying MF) comes in, I am for sure gonna look elsewhere...

@Carson Wilcox . I love how well you speak about your realtor. Many of us want to be part of the team. We aren’t just here for a buck. A great realtor will be a huge asset. I hope to find a great flipper to have a cohesive business relationship with. Fun to follow your path here. Thanks for sharing!

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