First Flip - 225K profit, more luck than skill on my end.
Hi All,
My partner and I completed my first fix and flip in Berkeley CA. He is a contractor/investor who has done a few flips and I'm just a guy who is interested in real estate. I studied the market for more than a year and all my offers were rejected before finally getting getting this fixer. As you can guess, the Bay Area is crazy expensive and our flip did not come cheap. We transformed a two bedroom one bathroom house into a three bedroom two bathroom house with an additional bathroom in the garage and staged the garage as living space. We moved the kitchen to the dining room, opened up the wall and created a master suite from where the old kitchen stood. We did not expand the envelope of the building and only worked with what was originally there.
Since my partner was also my contractor, I paid him half the renovation cost and he did the work. I think I overpaid a bit on construction from what I've seen other people pay for a gut rehab (damn Bay Area pricing). The flip took long, too long as this was my first time submitting permits. The permitting process took us four months and then my partner had to finish his other flip before starting on ours. The total time took about a year from purchase. If I had to change a few things, I would get a few more bids to make sure pricing is okay and make sure we are on schedule. Also, I made him do a few last minute changes because we didn't talk through all the details. I still don't feel I know construction at all aside from a few simple things. The first one is luck, if the second one goes well, I'll call it skill.
$750,000 - Purchase Price
$200,000 - Total Cost (Renovation Costs)
$100,000 - Commission/Taxes/Fees/Escrow/Holding Costs
$1,275,000 - Sale Price
$225,000 - Profit