New Investor - Fix & Flip - Offer Strategy & Tenant Management

[Trevor Brouelette]

Hello everyone!

I'm a new real estate investor focused on the Fix & Flip strategy in North County San Diego. I'm fortunate to have strong financial backing—an equity partner and a reliable private money lender who have investment experience—allowing us to pay cash for the purchase.

I’ve identified a promising property and am preparing my action plan. I'd appreciate the community's insights, particularly regarding my offering strategy and managing the in-place tenant.

The Opportunity & The Numbers

• Location: North County San Diego
• List Price: $719,000
• Estimated ARV: Approx. $840,000
• Estimated Repair Cost (ERC): $75,000 to $100,000 (Full cosmetic rehab only; major systems are reportedly sound. Entire home is dated, distressed, and ugly).
• Target Net Profit: $50,000+
• PML Terms: 10% interest-only rate.

Target Buyer: We are aiming for young families who want a nice, clean, modern home with good finishes and clean curb appeal—nothing luxury or over the top.

The Tenant & Holding Strategy

• Current Occupancy: Tenant is month-to-month, currently paying $2,500/month.
• Proposed Plan: The tenant reportedly “excellent” and has offered to pay $3,000/month to stay for a few extra months.
• Financial & Strategic Benefit: While tenant is occupied, the property will yield an estimated 4% cash-on-cash return. This could allow me to build my network of subcontractors and finalize detailed renovation plans without the pressure of a vacant asset over the holiday season.

Tenant Legal Question: Since this is in California, what is the required notice to terminate a month-to-month lease for an owner-occupied renovation: 30 days or 60 days?

My Offer & Due Diligence Plan

I am attending the open house next week to verify the property's condition.

My plan is to have an offer ready to go and submit it immediately if the property meets expectations. Crucially, my offer would include a brief inspection contingency focused specifically on verifying the major systems (HVAC, roof, etc.) that the agent claims are in good shape.

Core Questions & Request for Advice

1. Is my offer plan wise to have something drafted prior to the open house?
2. Tenant Management: Is the strategy of keeping the tenant for 2-3 months to offset costs and defer the rehab startup a smart move or a complication? What are the biggest logistical or legal pitfalls I need to be aware of when buying a tenant-occupied flip in CA?

Any guidance or cautionary tales from those who have successfully flipped in this region or dealt with similar tenant scenarios would be incredibly valuable!

[Nicholas L.]

@Trevor Brouelette

hello.  i don't know the SD market, and i may be missing something, but if this property is 1. on market and 2. needs the rehab you say it does, then it's not a good deal, and won't work as a flip with those numbers - you'd need to get at way, way under asking price.

the fact that it's occupied seems to make it even less appealing.

and, it won't yield any return while it's being held - closing costs on the purchase and holding costs will easily exceed rent.  it should not take you months to line up contractors.  and yes, the agent's opinion on things is irrelevant.  it either needs them or it doesn't.

hope this helps

and let me know if i am missing something...