My next rehab in Orange County

My next rehab in Orange County

Flipper · Irvine, CA · Member since 2013 · 349 posts · 45 votes

Hello BP Nation,

Very excited to post a property we just completed. This one is a SFH, 1909 sq ft, 4 beds, 3 baths. It was a total gut job including moving the kitchen to another area and adding a bedroom and bath (originally 3 bed, 1.75 bath). It will be listed this weekend. Here are the numbers:

  • $455,000 purchase price
  • $5,492 closing cost
  • $56,000 renovation cost
  • $4,000 landscape cost
  • $5,351 various costs including fixtures, appliances, staging furniture, etc.
  • $1,370 taxes
  • $150 total utilities
  • $29,925 commission
  • $5,000 closing cost

Total cost $562,288

Listing price $630,000

Estimated net profit $67,712

Here are some before and after pictures:

Living room

Living room

Fireplace

Fireplace

Den

Removed den, replaced with mud room with tech center.

Kitchen

Kitchen

Removed the kitchen and replaced with Master room and 4th bedroom.

Makeshift 3rd bedroom (across from kitchen).

Removed the 3rd bedroom and converted to dining room.

Removed the 3rd bedroom and converted to dining room.

This was a family room (back of the house).

Moved kitchen to back of house.

Kitchen

Bathroom #3

Bathroom #3

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Will BarnardPro Member
Moderator
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
12y

A happy wife is a happy life!

See this reply in the discussion

32 Replies

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  • Real Estate Agent · Milwaukee County, WI · Member since 2009 · 3k+ posts · 525 votes
    12y

    Very nice California rehab

    congrats

  • Full-Time Investor · Charlotte, NC · Member since 2009 · 2k+ posts · 1k+ votes
    12y
    Congrats... Was this done all cash? I don't see any finance costs.. Seems thin to me, although it looks great :). I'm not familiar with California- are you using a discount broker or is that the normal commission percentage? Also, from what I've heard about California's high rates to do just about anything, I'm really impressed with your rehab budget for that scope of work!
  • Rehabber · Los Angeles, CA · Member since 2013 · 24 posts · 1 vote
    12y

    Wow @Jimmy Hong !

    I love what you did with the place.

    I am in Southern California as well and curious what kind of funds you used to complete the project?

  • Flipper · Irvine, CA · Member since 2013 · 349 posts · 45 votes
    12y

    Thanks @Ramon Jenkins ,

    Yes @Account Closed , this was all cash purchase so no holding costs except for utilties, taxes, also no hoa. We can't really do 70% rule here due to competition or else we'll never be able to acquire any properties. Normal commission is 5% to 6%, but my agent charges 4.75% for repeat business, and he does a great job. We also have a couple of contractors that we have a good rapport with and they give us below competitor rates for repeat business also.

    You're definitely right about high Cali rates but we try to focus on the upsides of Southern California. Which are tons of people and properties, so we'll be able to find a deal if we are diligent enough. Also, there are so many types of buyers we are confident in our product when we list.

  • Flipper · Irvine, CA · Member since 2013 · 349 posts · 45 votes
    12y

    Hi @Michelle Ferrand , thanks for complement. We didn't take out a loan or hard money if I'm understanding your question correctly. The property and rehab was funded through our own capital.

  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    12y

    Congrats Jimmy on a job well done. I lump landscaping, staging, appliances, fixtures, etc all as part of the rehab. Doing that here makes your rehab about $65k. With a purchase of $455k, you are all-in for $520k and if the exit is $630k, then your deal was an 82% deal which is tight! but doable if you get in and out quickly. Hopefully this was all cash and you didn't have financing costs. I didn't see anything for insurance and I will assume you did have it.

    If all cash, and counting your holding and resale costs, you could make $67k with a cash outlay of $527k which gets you a 12.7% cash on cash return. If you get in and out in 4 moths, then that is a 38% annual return. Not bad for your first attempt. Next time, pay very close attention to your costs and make your offers accordingly so that you can be all-in for under 80%.

  • Rehabber · Los Angeles, CA · Member since 2013 · 24 posts · 1 vote
    12y

    Yup @Jimmy Hong that is what I was asking :)

  • Flipper · Irvine, CA · Member since 2013 · 349 posts · 45 votes
    12y

    Hi @Will Barnard , thanks for your input, its always appreciated. I did forget to include $461 for insurance and yes it is an all cash deal so no financing involved. I'll shoot for the 80% on my next one. This is our second attempt, we did our first last year:

    http://www.biggerpockets.com/forums/67/topics/88952-my-first-rehab-in-orange-county

    Also, I look forward to hearing you speak on March 11.

  • Full-Time Investor · Charlotte, NC · Member since 2009 · 2k+ posts · 1k+ votes
    12y

    makes me happy I'm in north Carolina! :) when did you buy/start the project? it really does look great for that rehab budget..i don't know California costs, but I'm super impressed you were able to get all that done on that budget. I just assumed it'd cost more in cali...congrats, and on to the next!

  • Flipper · Irvine, CA · Member since 2013 · 349 posts · 45 votes
    12y

    Thanks again @Account Closed , we purchased this October 2013.

  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    12y

    Hopefully you will be out by March for under 5 months. Correction to my post, congrats on your SECOND flip, keep up the good work.

  • Investor · Raleigh, NC · Member since 2013 · 348 posts · 128 votes
    12y

    @Jimmy Hong

    Awesome job. The staging on this house is killer. I'd hold on to whoever did the staging for you or if you did it yourself give yourself a pat on the back for me. Beautiful job.

  • Flipper · Irvine, CA · Member since 2013 · 349 posts · 45 votes
    12y

    Thank you @Jacob A. , I have no creative ability whatsoever. Design, remodel, staging, etc is all done by the talent of our team (my wife). So its in my best interest to hold on to her. Oh, and the marriage isn't to shabby either.

  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    12y

    A happy wife is a happy life!

  • Investor · Los Angeles, CA · Member since 2013 · 3 posts · 0 votes
    12y

    @Jimmy Hong

    Congrats on a super looking rehab! As I scour Southern Cal for my next rehab opportunity, it is good to see the different examples of deals done. Thanks for the info.

  • Flipper · Irvine, CA · Member since 2013 · 349 posts · 45 votes
    12y

    Thank you @Antoine P. , couldn't have done it without the resources of BP.

  • Brandon TurnerPro Member
    Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
    12y

    Great work @Jimmy Hong !

  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
    12y

    @Jimmy Hong Great job! Where is the house at?

  • Flipper · Irvine, CA · Member since 2013 · 349 posts · 45 votes
    12y

    Hi @Karen Margrave , house is in Cypress.

  • Flipper · Irvine, CA · Member since 2013 · 349 posts · 45 votes
    12y
  • Chicago, IL · Member since 2014 · 710 posts · 200 votes
    12y

    nice work @Jimmy Hong

    The numbers aren't too bad for the market you are in if you get asking.

    Recommend picking up your RE license so you can save on commission. That 2.5% makes a difference when your flipping a $1M in total buy/sell

    Keep us informed on offers etc.

  • Investor · Wichita Falls, TX · Member since 2010 · 3k+ posts · 603 votes
    12y

    Very nice transformation @Jimmy Hong! Keep us posted on the selling process

  • Flipper · Irvine, CA · Member since 2013 · 349 posts · 45 votes
    12y

    Thanks @John Weidner , I've really been contemplating about getting a license this year.

    Thank you @Mehran K. , I definitely will. I'll update when we accept an offer. Hopefully sooner than later.

  • Wholesaler · Santa Fe Springs, CA · Member since 2009 · 219 posts · 83 votes
    12y

    Great job @Jimmy Hong

    Can you share with us how you acquired the property?

    MLS

    Direct from Seller

    ???

    Brian

  • Flipper · Irvine, CA · Member since 2013 · 349 posts · 45 votes
    12y

    Hi @Brian Wall , MLS.

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