New Project: Chandler AZ flip

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New Project: Chandler AZ flip

Mazz Gino
Realtor · Scottsdale Arizona · Member since 2017 · 20 posts · 7 votes
Hey BP, So I just stated my first flip in Chandler Az! Super excited to hit the ground running. Contracts have been signed, closing is set to take place on the 20th of March. As an added bonus, the sellers sold the home with all belongings staying. Furniture is solid and there seems to be a decent amount of "valuable" things laying around. Lots of model airplanes, cooking appliances, tools, motor scooter, ect. Step one is to get as many contractors and subs through the door as possible before we officially close. Purchase price: $261,700 $105.35/sf Budget of $20k $8.00/SF Neighborhood is at $135-$150/SF I am confident I can fall around $140/SF. The only thing that makes me nervous is that this home does not have a pool so it will be interesting to see where we fall when all is said and done. I think we will exceed our budget. The quotes we have been getting are pointing towards at $25-27k job here... need to work on that. Major work to be done: Flooring throughout Paint interior and exterior Bathroom remodeling New granite in kitchen Landscaping General repairs Finishing touches NEED ADVICE Need a good recommendation on a tile and flooring guy in Chandler Az. I've been getting a lot of quotes and these contractors seem to think a 40% waste factor is what it's going to take to get the job done.. Does anyone have a go to tile and flooring guy that they use in the Valley? Thanks, G
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Doug McVinuaPro Member
Property Manager · Queen Creek, AZ · Member since 2016 · 608 posts · 426 votes
9y

@Mazz Gino Not positive but I would bet Benito would/does paint cabinets. 

Benito has been doing drywall work and paint in a large custom home for me this week.

[email protected]602-751-7577
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  • Bob Okenwa
    Real Estate Agent/Investor · Peoria, AZ · Member since 2016 · 2k+ posts · 2k+ votes
    9y

    @Mazz Gino Congrats on getting the house under contract and getting your feet wet. Waiting on my first deal so I know you're excited and ready to rock. For that sized home, 27k is a pretty good bid. Are you using a GC or overseeing it yourself? I've been looking for a tile guy myself and will be interested in seeing if anyone has any good recommendations. Also, 40% waste seems very high. I would imagine it'd be more in the 10%-15% range but buying extra tile can always go towards the next flip also so technically it wouldn't be a waste.

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  • Evan Bell
    Real Estate Agent · San Diego, CA · Member since 2015 · 293 posts · 109 votes
    9y
    Are you going to sell off all the stuff the previous owner left to help fund the rehab?
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  • Erik Larson
    Investor · Chandler, AZ · Member since 2017 · 33 posts · 10 votes
    9y

    If the furniture is nice enough might be able to reuse it for staging.

    Congrats on picking up in Chandler. As for flooring I can't really help, but if you are going to have tile removed use a dustless removal crew. I toasted my hepa filter in my brand new A/C unit when demoing only a small portion of my kitchen which too me and my tile guy several hours. I had Jack King come in @7am and blow out almost 1500 ft of terrible tile, they were cleaned up and gone by 9:30, but it cost $3k to remove that. Very very little dust left. My tile guy was a GC, cost was great but reliability was terrible, it was my house so no problem it took 2 weeks to tile, in a flip no way. Also check with Frank at Kaiser Tile, he turned me on to my GC, depending on price and time it might not be bad. I'd also proudly display his work on my place if you'd like to talk about him. I did make him lay 3x4 foot industrial tile though, he wasn't happy haha.

    Source your tile direct from that place up on Elliot and 10, pick up something cheap, but normal. You'd probably save a good portion of material that way, I also got my thinset from lowes (I bought and carried it, Mapei) and the grout I picked up from Big D's tile over off Elliot. They had a pretty good list of installers last I saw, might want to drop in there.

    How long have you been in Chandler? BTW I might be able to help out with somethings if needed or liked, or even just to talk, I'm right at Ray and the 101 and work for myself so my schedule is pretty open. 

    Erik

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  • Mazz Gino
    OP
    Realtor · Scottsdale Arizona · Member since 2017 · 20 posts · 7 votes
    9y

    @Bob Okenwa Thanks man! I'm getting quotes from a few different GCs, probably going to sub it out and oversee it myself. It is kind of hard for me though because I am still living in NJ... I'll be back and forth to AZ a few times in the next couple of months. I am still finishing up work here in NJ but will be in AZ permanently in the near future. The quotes I got, I was told 10% waste but when I run the numbers based on their measurements it comes out to 40% over my total SF. And thats really not a bad idea at all about carrying the material over to the next project. That is good advice. 

    @Evan Bell Yeah absolutely going to sell off the possessions. I plan to recoup nearly $1500-2K when all is said and done. Decent stuff being left behind. Mostly donatable clothing and what not but definitely some diamonds in the ruff in the left overs. 

    @Erik Larson The furniture is not good for staging. Its too specific if that makes any sense. I would like get something more modern for staging purposes. Would definitely enjoy meeting up and talking shop one of the times I'm out at my project next. DM me and we can share contact details. I won't be back in AZ for another 3 or 4 weeks. Which works out well because closing is not set until the end of the month anyway. Thanks for all the good info for flooring. I will definitely check those places out. 

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  • Mazz Gino
    OP
    Realtor · Scottsdale Arizona · Member since 2017 · 20 posts · 7 votes
    9y

    By the way, one guy I have been dealing with for flooring is First Stop Flooring. I seem to like them the best at the moment. I haven't pulled the trigger on anyone yet though. I have until the end of the month until I close so I want to get as many quotes as possible. 

    I'm really liking the porcelain tile that is the wood lookalike. Best quote I have seen on that so far is $5/SF installed. I'll get the company name posted once I receive the quote on paper. 

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  • Bob Okenwa
    Real Estate Agent/Investor · Peoria, AZ · Member since 2016 · 2k+ posts · 2k+ votes
    9y

    @Mazz Gino Do you think you'd be able to PM me the names of some of those GC's? Just wanna make sure I'm getting the most competitive bids when I get started. Thanks.

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  • Stone Jin
    Rental Property Investor · Chandler AZ and Sylvania, OH · Member since 2009 · 708 posts · 561 votes
    9y

    $5 a foot install including thinset and grout or just labor?  Seems pricey to me.  PM and I can give you a recommendation.

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  • Mazz Gino
    OP
    Realtor · Scottsdale Arizona · Member since 2017 · 20 posts · 7 votes
    9y

    @Bob Okenwa just sent you a PM and request. Let me know! 

    @Stone Jin PM you now. You think thats pricey? And yes $5 all in and installed. If you have better pricing on wood look alike I would definitely be interested in hearing more. 

    What is everyones general thought on the house not having a pool? Should that affect the value as drastically as I am anticipating?

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  • Stone Jin
    Rental Property Investor · Chandler AZ and Sylvania, OH · Member since 2009 · 708 posts · 561 votes
    9y

    $5 including all materials?  So wood look a like tile is now under $2 sqft, thinset and grout is about $.20 a square ft, so roughly you are at $2.25 in materials, so that's $2.75 in labor per sqft.  The guy I've been using for the last 6 years does it for less, that's my price anyways.  

    I buy my grout and thinset from Monterey Tile in Chandler, lately I've been getting tile from Home Depot just because I need small batch (couple of pallettes).  

    I'm sure you are getting a fair deal, I'm in the buy and hold business not flip so my mindset is probably a little different.

    Best of luck with your project and let me know if you need any reference for trades.

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  • Erik Larson
    Investor · Chandler, AZ · Member since 2017 · 33 posts · 10 votes
    9y

    Kaiser has "construction" quality tile, which is actually about 10 different wood tiles. Made by Moda tile but rebranded for Kaiser, about $2.50-$3.50 (12x24) a foot a lot of it on hand in the warehouse. Floor and Decor does have it for sub $2 a foot (usually 6x24), limited supplies of some. HD is good as well as Stone stated.

    Oh about the pool, it's hit and miss. Consensus is usually 50/50 unless the family looking has kids, then then tend to lean towards the pool. Thing is buyers want all new pool stuff usually. Pump, filters etc can add up to $5k (new and installed), redoing the pool in pebble tec is about another $4k-$6k, redoing cool deck another $1500-$4k. "Added" value might be $10-$15k. My REA only loves pools on the sale of the REO because they can down the appraisal by $10k-$15k on a totally messed up pool, which could cost $4k-$10k to fix. Do you have a HOA, with a comm. pool in this flip? Or a near by park with a splash pad (market this if you have a family with kids and no pool).

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  • Bob Okenwa
    Real Estate Agent/Investor · Peoria, AZ · Member since 2016 · 2k+ posts · 2k+ votes
    9y

    @Mazz Gino Thanks for the PM. I appreciate the info. The pool thing can be tricky as there tends to be quite a lot of kids drowning or falling in pools out here each summer so having a fence is something to consider adding if the pool does not already have one. This is assuming buyers in the area are families with smaller children rather than those with teenagers or those with no children. I thought $5 sq. ft. installed was a pretty good price personally. @Stone Jin must have a great contact for that tile work.

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  • Doug McVinuaPro Member
    Property Manager · Queen Creek, AZ · Member since 2016 · 608 posts · 426 votes
    9y

    @Mazz Gino A fantastic painter resource: Benito @ Four, eight o- 201-3555.

    Benito also has a ton of other connections that can be useful. His English isn't very good but he and his crew are mad painters and also will do other projects. He's one of those with 20 cousins in the trades business. lol

    They bid a 1400 sq ft West Chandler property for me on a Friday afternoon, started Saturday am and were done Sunday by noon. Full interior, ceilings, closets, 2 tone, all trim, doors, semi-gloss in the baths and kitchen. The boy can just flat get it done and the work looks good at a very reasonable price.

    [email protected]602-751-7577
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  • Mazz Gino
    OP
    Realtor · Scottsdale Arizona · Member since 2017 · 20 posts · 7 votes
    9y

    @Stone Jin good info, thanks for the PM. Really Appreciate it. 

    @Erik Larson no pool nearby unfortunately. Out here in NJ pools are looked at in your premium houses and are for those with big budgets when buying. Cost of ownership for a pool out here is definitely higher and the utility of a pool is decreased because our seasons are a lot different. So when selling homes in the starter or young family stage not having a pool is nbd. In Arizona I see that so many houses have pools so my thought process was that not having a pool could be a detraction, even marketing towards buyers in that class. If the added value is only $10-15K than I would think I am in pretty good shape with the way I am running my pricing scenarios. Im looking to market the home for around $340-360K. My competition analysis points me in that direction.  If I can get $136/SF for the home I am in good shape. Anything over that its just gravy. 

    @Bob Okenwa Yeah Jin looks like he's got a good contact. I will definitely be placing a call that way. Thanks for your input! 

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  • Erik Larson
    Investor · Chandler, AZ · Member since 2017 · 33 posts · 10 votes
    9y
    My pool fence was $2k for a straight shot of 22 ft. 'Top of the line'. Mazz Gino sounds like a good area, I expect you to fetch your price.
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  • Doug McVinuaPro Member
    Property Manager · Queen Creek, AZ · Member since 2016 · 608 posts · 426 votes
    9y

    @Mazz Gino Pools in AZ do add value, $7500-15K is common for a functional pool. Pools are popular in AZ as we don't have winterization etc that is so costly in other climates.

    Do you need a pool to sell a house, absolutely not! Getting the property sharp will attract a large pool of buyers that either don't want a pool or are neutral.

    [email protected]602-751-7577
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  • Mazz Gino
    OP
    Realtor · Scottsdale Arizona · Member since 2017 · 20 posts · 7 votes
    9y

    @Doug McVinua good to know! Definitely going to keep that one in mind going forward. Especially what @Erik Larson said about REO props wit a beat up pool. Doug, does Benito paint cabinets at all?

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  • Doug McVinuaPro Member
    Property Manager · Queen Creek, AZ · Member since 2016 · 608 posts · 426 votes
    9y

    @Mazz Gino Not positive but I would bet Benito would/does paint cabinets. 

    Benito has been doing drywall work and paint in a large custom home for me this week.

    [email protected]602-751-7577
    1Reply
  • Bevla Reeves
    Real Estate Agent · Scottsdale, AZ · Member since 2011 · 471 posts · 296 votes
    9y

    Congrats @Mazz Gino!!!

    With your $20k budget it sounds like your plan is a quick cosmetic fix-up and that's it (kitchen and 2 bathrooms ONLY)!

    I'm finding that $35k/sf is the least I can spend on top-dollar cosmetic fix-ups...$35k-$95k/sf on structural/rough-in fix-ups.

    It sucks to Fix & Flip in PHX right now...no cheap properties available and construction costs are astronomical!

    ...if your Flip doesn't have a pool, be very careful comparing it to those with pools!

    Good luck warrior!!! ;)

    1Reply
  • Bevla Reeves
    Real Estate Agent · Scottsdale, AZ · Member since 2011 · 471 posts · 296 votes
    9y

    @Mazz Gino send us pics when you can!! ;)

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  • Mazz Gino
    OP
    Realtor · Scottsdale Arizona · Member since 2017 · 20 posts · 7 votes
    9y

    @Bevla Reeves thanks! Yeah.. its looking more like a $30K job as these quotes are rolling in. Im doing kitchen, baths, flooring, landscape, and general repair. House has great curb appeal and structural elements are 100%. 

    As soon as I get around to it I will be doing before and afters and I'll absolutely share. 

    1Reply
  • Dallas Trufyn
    Investor · Edmonton, Alberta · Member since 2017 · 94 posts · 72 votes
    9y

    Congrats and I hope it all goes well! Yes...the budget will ALWAYS be more than you expect (always have a contingency)!

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  • Shiloh LundahlPro Member
    Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
    9y

    @Mazz Gino  I don't mean to be a naysayer on this flip but I am wondering if the margin is big enough. 

    Sales price - $347,774 (261,700/$105.35 = 2484 square feet x $140)

    Selling Closing costs $34,777 (3% to buyers agent, 3% to sellers agent, 1% to title and 3% to sellers concessions)

    Holding costs $2000 (large home held for 2 month rehab, 1 month in market, and 1.5 month closing)

    Hard money - $11,611  (90% of 262k x .9 = 235,800 x .12 interest rate = 28,296/12 months = 2358 x 4.5 months turn time = 10,611 + 1000 doc fee) unless your not using hard money.

    Rehab 25k (I think this might be a little low)

    Purchase closing costs - $3000

    Purchase price - $261,700

    Profit = $9685 (unless you can sell for more, rehab for less and still keep the sales price, don't use hard money, or you can lessen the closing costs)

    The unknowns are how much value not having a pool can bring down the sales price, if the rehab is more than expected, length of time to sell, etc.

    I think it is great that you are jumping in, I just didn't know how you were working your numbers and at a relatively high price point in AZ I think it would be important to do the numbers right otherwise you may lose on your first deal.

    How are you running your numbers?

    480-206-1209Podcast Guest on Show #287
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  • Mazz Gino
    OP
    Realtor · Scottsdale Arizona · Member since 2017 · 20 posts · 7 votes
    9y

    My RE commission is 4% and my selling costs won't top $25K at the highest. I am cash guy so no HML costs. Purchase closing costs were not 3K. Personally I have not seen a residential RE deal take 1.5 months to close. I am a commercial RE broker and that is typical for smaller deals in the commercial realm, and way short for the larger deals (can take anywhere from 3-6 months) .. but for residential I see closings take place in 15-30 days tops. I just closed on 4 homes (some are flips some are sales) and the longest closing is this one toping out at 27 days.

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  • Mazz Gino
    OP
    Realtor · Scottsdale Arizona · Member since 2017 · 20 posts · 7 votes
    9y

    I've got a great agent that I run with in AZ who hooks me up on the sales commissions. Very investor friendly and knows how to get a home sold quick. Im convinced the guy doesn't sleep. 

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  • Daniel Corbett
    Gilbert, AZ · Member since 2016 · 4 posts · 2 votes
    9y

    Any updates on this project?

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