Diary: Single Family - Land Park - Sacramento, CA

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Diary: Single Family - Land Park - Sacramento, CA

Brennen Cook
Elk Grove, CA · Member since 2014 · 82 posts · 5 votes

1317 1st Avenue Sacramento, CA 95818

Hello BP,

Here with a deal diary this time!

This single family home is located at the above address. It is currently a 3 bedroom 1 and a half bath house with 1378 square feet. Literally just closed on this house not even a day ago now.

This deal should be very interesting. Land Park is a HIGHLY desirable neighborhood near downtown Sac. Although I will admit I believe we are pushing the boundaries on this one I am very confident in the end result. Here is my basic evaluation. I try my best to be as conservative as I can that way to leave myself the most upset. Prepare for the worst....

ARV: $480,000+ ( Some comps dictate an even high $/SquareFoot )

Purchase Price: $320,000 ( Cash )

Rehab: $80,000 ( Interior/ Exterior )

Real Estate Commission: $23,000

Closing Costs, Taxes, Small Misc: $12,000

Conservative Profit: $45,000

Cash Out of Pocket: $400,000

Cash on Cash Return: 11.25%

Acquisition to Resale Time: 4 Months

Annualized Return: 33.75%

1317 1st Avenue Before Pictures

We will be converting this to a 3/2

My phone died while taking photos. More to be uploaded. That is most of the house. The missing pictures are of the back yard, screened patio area with laundry, detached garage. Pictures to follow.

When I comped this out it seems as the further you get away from 1317, the higher price per square foot gets. There is also a rehabbed property at 1325 1st Avenue that sold for $335 a square foot. It appears as if it was a minimal rehab and I know some of the construction cost had to go to unanticipated structural problems. Looked at property and spoke with neighbors

I think that an ARV of $480k or $348/ Square foot is being conservative for a well done, rehabbed and fresh product. There are some houses in the area that have sold for $400+ a square foot. I am not saying that is likely to happen here, but I could see a nice house in this area selling for $370 a square foot, easily. ( That is me with my fingers crossed and hoping)

I feel comfortable with this deal and the potential money to be made. I think on the conservative side ( which is what I try to plan for) there is decent profit to be made. I think property has some serious upside potential though! I would love to rehab this house very nice and it sell for $520k! =)

I would love to hear what everyone thinks. I plan to update this each week with progress pictures once work begins. Would love to hear opinions, suggestions, and ideas.

Do not be afraid to bust my bubble! 

I am posting this to learn myself and for everyone to potentially learn along the way. Please post any comments, suggestions, design ideas, anything! Know an architect? POST IT! Got an idea? POST IT!

Look forwarded to flipping this one with this diary..

Talk to you all soon!

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Chris Vail
Investor · Sacramento, CA · Member since 2014 · 308 posts · 94 votes
11y

@Brennen Cook I am trying to figure out what you are going to do to the house that is going to push the value up to 480,000.  Two houses down at 1325 1st ave sold on 2/20/2015 for 410k  it was a nicely (completely) rehabbed 3 bed 2 bath granted it was only 1224 sq ft versus your 3 bed 1.5 bath that is 1378 sq ft however both lots are 5,227 sq ft.  I am just struggling with how you are planing to add an additional 70,000 in value over the house that is the perfect comp for the area of what should be able to expect.  Just playing devils advocate here as I can't wrap my head around what you could possibly do to add 70,000 in value.

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  • Brennen Cook
    OP
    Elk Grove, CA · Member since 2014 · 82 posts · 5 votes
    10y
    Originally posted by @Tom V.:

    I doubt that the wall on the right of the kitchen is holding up he house.    The space between the living room and the dining room as a single volume sugg sts that you ceiling joists span from outside wall to outside wall.  

     Thanks, Tom V for the interest!

    I have to say between investing, being my own agent, and helping out others not only invest, but purchase their own homes, my plate is extremely full! BUT I want everyone who is interested in this project to know how it goes. Sorry about the LONG delays. I should have been more prepared for this diary when committed to start it!

    This project is finished as of last week. I am still having permit issues with the back end of the home. The previous home owner got a permit for a "screened in porch" addition to the back of the house. Once the permit passed, the homeowner at a later date (whichout permit) finished the back end into "livable space". I am battle with the city to either return the porch to original design, or bring it up to code for living space which includes a concrete footing. Which will then require me to spend ALOT of money on a very labor intensive process. And I would have to break up a lot of the new decorative driveway that was just poured! This issue is actually being resolved tomorrow and I will let everyone know how that goes. Fingers crossed by this weekend, permits will be passed and closed and the house will be placed on market by next week.

    Pictures to follow in an immediate post..

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  • Brennen Cook
    OP
    Elk Grove, CA · Member since 2014 · 82 posts · 5 votes
    10y

    Before Kitchen

    After Kitchen

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  • Brennen Cook
    OP
    Elk Grove, CA · Member since 2014 · 82 posts · 5 votes
    10y
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  • Brennen Cook
    OP
    Elk Grove, CA · Member since 2014 · 82 posts · 5 votes
    10y

    https://www.redfin.com/CA/Sacramento/1317-1st-Ave-...

    Presale before pictures

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  • Tom V.
    San Francisco, CA · Member since 2014 · 345 posts · 281 votes
    10y

    Hey Brennen -  Good work and nice finish choices.  

    I hope these permit issues go in your favor.  Those kinds of after-the-fact issues can be a real bear and very subjective depending on who you get as an inspector/permit checker.  

    I have been advised to avoid the obese bearded guy at 300 Richards whenever possible.  

    Good luck!

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  • Tom V.
    San Francisco, CA · Member since 2014 · 345 posts · 281 votes
    10y

    @Brennen Cook I see that you got this sold for $544K this Spring.  Congratulations. 

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  • Brennen Cook
    OP
    Elk Grove, CA · Member since 2014 · 82 posts · 5 votes
    10y
    Originally posted by @Tom V.:

    @Brennen Cook I see that you got this sold for $544K this Spring.  Congratulations. 

    Thank you! I did. I apologize for not keeping this post up to date. I was very happy with the price. To be completely fair for numbers sake, the home buyer was an active military pilot using a VA loan. I covered just under 11k in closing costs. Well worth it! Thanks for noticing and the post! I love it when a property sells as more confirmation to my initial numbers.

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