Too big of a risk on a Napa valley flip

[Jackson Carr]

Hey all,

I have an off market opportunity in North bay San Francisco (Napa CA in particular) on a 6 plex and I need a little advise from some more experienced flippers than myself.  My experience has mainly been small flips 30-50k remodels, so this would be my largest and most extensive. What do you all think. I will try to be as in depth as possible.

Property is zoned for mix use of heavy commercial/residential. It has a 3/2, 2/1, 1/1 house on the site with a approximate 2000 sqft commercial building (currently being used as a 3 plex) on the .33 acre site right off the freeway in Napa.

Issues:

Structural- The 1/1 has cracking slab foundation. Haven't even brought anyone out too look at it yet. I am still trying to determine feasibility.

Roof- All four need new roofs with all units showing signs of water intrusion. 2 units have full ceiling cracks with sagging.

Aesthetics- Needs a complete makeover (lipstick on a pig). Floors, paint, kitchens, bathrooms.

One room has a pair of vice grips sticking out of the wall that have been plastered and painted in.

Permitting- Nightmare. Unpermitted add on bathrooms, garage bathrooms, electrical submetering area, 1 water line for 4 buildings, sewer, electrical, water.......... Etc.

The big question- Can the commercial building currently being used as a 3 plex stay that way? It is worth double the amount that way.

According to my GC- total rough cost between 100/sqft. This is in Napa and I wanted him to go conservative. I think he is in the ballpark considering pulling a water permit might make us have to go back to the street and upsize a line as an example of the financial Pandora's box we can open with every turn. Total being between 480k.

Comps/Cost- The cost of this will be about 1 million after closing costs. I am unsure of hard money costs on something this large and risky. I have the down payment though at 75% LTV. Then add the additional remodel costs. The comps are hard for this property due to the uniqueness of the situation. I have talked with multiple realtors who have came in around 1.8-2.0.

So total

Comp sale- (acquisition + remodel+ hard money) = Worth it?

1,800,000- (1,000,000+ 480,000+ 200,000?) =120,000

This all leaves some room for error, but not much.  For 120k profit I feel like I could do a few SFHs for

Thanks,

Jack