Real Estate Investor & Consultant · Los Angeles, CA · Member since 2016 · 620 posts · 386 votes
BP Community,
This is Shawn Ward of Belle Hampton Properties in Los Angeles. My partner and I just purchased our next flip in South Los Angeles and decided that instead of posting a success story at the end (which I still hope to do), I'd actually post weekly updates here and can take you guys along the journey with us and answer any questions that may arise.
Background:
List Price: $425k
Purchase Price: $410k
Financing: With Hard Money Lender & Private Investor
Rehab Budget: $75k
ARV: $625k
Target Flip Timeframe: 10-12 Weeks
House: Beautiful Craftsman (see attached); it's a 2/1 now and we are converting it into a 2/2.
SIDE NOTE: We just went into contract on a second flip in Montecito so we'll be doing two flips at the same time.
We got started with the rehab a few days later than we wanted due to the fact we are working with a new sub contractor. I knew him personally from some other work he's done at a friend of mine's house, so it wasn't hard finding him. He has his own crew and they showed up Day 1 and started demo.
We are taking out 1/2 of a wall between dining and kitchen to open it up. There are SO many great craftsman details on the inside, so we are keeping most of it in place.
This Weeks notes:
1. Current Bathroom is being totally redone, and we are creating a new on-suite for the master.
2. We are pushing the closet in the master back to create a larger room
3. We are putting a door to the master that will lead to the back new deck we are building
4. Pulling up all of the carpet to have the original floors refurbished
5. Ripping the entire current kitchen out
So far, we are only in the 1st week of rehab, but we feel comfortable that we can stay on track to finish July 24th and stay on budget, but we have built in some contingencies that will allow for unforeseen items that come up.
Again, images attached and more updates next Wednesday.
- Kitchen, bathroom and dining have all been gutted to bring in the new
- We are in the beginning stages of adding the 2nd bath in master
- Closet in master has been moved back
- We've decided to add a vaulted ceiling in the living room. It's a $4,500 expense that we feel comfortable we can get $7k for on the backend, so we are able to get the wow factor and make money from it at the same time.
- HVAC upgrade process has started
- We took down the upper shelved in the dining to open the kitchen to the living space. We kept the lower shelves because we love the Craftsman details. See image below of opening.
- We decided to put extra shelving in the pantry/mud room area...our sub is doing this for an extra $500.
2. TIMELINE:
- We started a week later than we wanted, as this was our first time working with the sub, but target completion is still July 24th (10 weeks from start rehab date). Looking good.
3. BUDGET:
- We are on the original budget with the addition of the $4,500 for vaulted ceiling and the $500 for the mud room and shelving.
4. MISC:
- We are interviewing landscapers now. We have one we've worked with in the past, but want to see if we can save some money while still getting great work.
- We are also in discussions with stagers. Again..have someone good, but looking for other options.
- We are adding security cameras soon (usually only need when we install appliances)
1. REHAB: - We blew out the ceiling in the living room to make way for the vaulted ceiling. You can see from the photos attached. The ceilings were already a nice height at 9'. Now, we'll be up to 14' and have the wow factor we really are going for.
- Even though we added the the vaulted ceiling, we were able to have it done without taking work away from the other items that are happening this week (plumbing and electrical).
- Landscaping has also started. Trees and bushes were cut down in the back and the bad grass was pulled up in the front. We are going to keep it pretty basic here and only spend around $4,500 on it.
- The new HVAC system duct work is installed in each room and light fixtures have been added. We are using a lot of can lights throughout.
- All new plumbing is also nearly done.
2. TIMELINE: - Our team (Me, my partner Zerik and our sub-contractor) had a timeline meeting yesterday to confirm where we are in the process and the overall Timeline. We are still on schedule to finish in 10 weeks (Juy 26th).
3. BUDGET: - We actually were able to finish our plumbing under budget so we used some of that money to create a mural in the backyard. Will have some photos soon.
- We are going to be submitting our first reimbursement draw from our HML next week. We are being reimbursed 75% of all of our rehab costs up to $100k which is a part of our loan. This will definitely ease the blow on our own pockets to get everything done. We have 3 draws, all after we spend $33k.
- Our first interest payment to our HML goes out next week also.
4. MISC:
- Our sub-contractor has been great. First time working together, but they are very efficient. We are drawing them out at 20/30/30/20 as work is done.
@Shawn Ward, just wanted to drop in and Congratulate you on not only this FLIP but your other one as well! Thanks for sharing, I need to do the same with my current project but haven't had the time of getting my thoughts together yet. Keep up the good work and thanks one again for sharing. Here is to wishing you a successful 2017 in your REI ventures!
1. REHAB: - The dry wall has gone up on the vaulted ceiling in the living room. Check out photos attached.
- The new bathroom tiles, tub and shower are being installed this week
- The mural in the back is about 1/3 done. Will have a great after photo when done
- The fence in the backyard is going up. 8' for lots of privacy
- HVAC, plumbing and electrical is still underway
2. TIMELINE:
- With it being Week 5, and 1/2 way to our goal of 10 weeks, our schedule is right on time
3. BUDGET: - We increased our rehab budget a bit and have allowed for $90k budget to get it where we want to be. With being 1/2 way done and only have spent $42k, we are good
- We received our first rehab draw reimbursement this week. We spent $33k and got $24,750 back. Helps with cash flow for sure!
4. MISC:
- Had a BPer stop by. Met @Devin McNichol (see selfie below) t a local Santa Monica REI Meetup group meeting at a luxury flip and we hit it off. So he came by to see what we do and talk potential collaborations.
Just stopped by the property today and some of the cosmetic items are being put together! This is a very exciting time for sure. The vision is becoming a reality. We are finishing Week 6 and we have 4 more to go. Things are pushing along nicely. Since it hardly ever rains here, our crew is able to come in 6 days/week and crank and thus delays have not really happened yet. Here are some details:
1. REHAB:
- The vaulted ceiling is now fully dry-walled
- Both bathrooms are around 75% completed with their respective tiling (note the yellow will be a theme on this house). As you'll see from the images, my partner decided to do something rather eccentric with the floor tile running up the walls. Pretty creative I think
- You can now see the little light box at the top of the living room that is available now from the vaulting
- All rooms' walls are going through finishing touches
2. TIMELINE:
- 4 weeks to go and all looks good. Completion date is still on track for July 24th.
3. BUDGET: - We've made our first mortgage payment so definitely make sure to account for all of your carrying costs.
4. MISC:
- We have a 2nd flip that has started in Montecito Heights. We are in Week 3 of that rehab now. Using some of the same crew but mostly other subs. Bigger property. Seeking a 3rd flip now also.
Shawn - Great work. I recently found out about this forum and have been addicted - such a wealth of knowledge here. Your post is an inspiration for first time investors like me. Keep us posted through your progress and I wish you the best. Looks great so far.
I am in the LA area and looking to take a dive into REI. I have an excellent credit and liquid cash to invest.
If you are looking to partner up in future projects please let me know. I am open to investing both in LA area as well as some of the out of state cities I am researching into.
Awesome Shawn, I have been following your thread. Keep up the good work, I am also in your market. I would love to come and see this project if possible and meet up with you. I'll pm you
The bones are solid and finishes are started to be installed rapidly. We are full steam ahead racing toward getting the house listed by the end of the month. We met with stagers this week also and finalizing the partner for this property and our other flip in Montecito Heights.
1. REHAB:
- Cabinets are installed in the kitchen
- Bathroom cabinets have been installed
- Cupboards have been installed in the pantry/mudroom
- The 8' fence has been installed and is creating the privacy we want for the house
- The mural is about 50% complete on the back large wall
2. TIMELINE:
- Completion date is still on track for July 24th.
3. BUDGET: - W'eve put forward our 2nd of 3 rehab draw requests with our HML and the inspection should be happening this week along with the wire transfer
4. MISC:
- We'll be preparing for our Friends & Family viewing & cocktail party at the property soon. Will be inviting the BP community to stop by for food, drinks and music.