Shingle Springs, CA · Member since 2017 · 24 posts · 119 votes
Hello investing friends! My very first "flip" went live on MLS today. What a great learning experience and it was definitely very different than what I've seen on HGTV. :) Nonetheless I LOVED the process.
Before/after pics attached. It was A LOT of work but the home cleaned up real nice. Now I'm hopeful for a quick sale!
A shout out to Brandon Turner for his book on REI that inspired me to understand the seller's motivations and concerns and then put together a creative offer to address them. That piece of advice helped me to land this deal despite several higher cash offers that were submitted.
Here are some pics along w/my before & after collage.
Shingle Springs, CA · Member since 2017 · 24 posts · 119 votes
8y
As requested, here are the #s as it stands today. I'm sure the profit will be something less than this once I close. I have a very long holding period on this project since it was incredibly difficult to find an available contractor. It took me 5 weeks of contacting 35+ contractors to find one and work didn't begin until ~8 weeks after close. The contractor also went over his projected timeline by 5 weeks. Partly due to weather and partly due to his double booking his time. Definitely a learning experience!
Purchase / Sale
Purchase Price (Act) $180,500
Sale Price (Est) $395,000
Fixed Costs
Buying Costs (Act) $14,267
Holding Costs (Est - this incl loan i pmt) $25,223
Selling Costs (Est) $23,550
Total Fixed Costs $63,040
Repair Costs
Finish Materials $22,924
Labor / Equip / Build Materials $58,158
Total Repair Costs $81,082
Total Project Cost (Less selling costs & ipmt) $282,203
Total Investment $324,622
Profit $70,378
Also, here is some more info on how I found the deal. I found it via a Zillow alert that I have set up for my area. The previous owner's daughter listed it FSBO on Zillow 10 days before it was due to go to county auction for a tax lien. I was one of 5 offers within 3 days and they told me that they selected my offer over other higher cash offers because mine was the most creative & did the most to help them out in a difficult situation. I offered his full asking price but in addition to my "cash offer" I also offered to pain the lien, to hire movers for him, provide moving supplies, provide a 10x20 storage paid for 3 months. Aside from the lien, it was only ~$2k for everything stated. Since we closed in 7 days and he had so many "treasures" I gave him and additional 12 days to clear whatever he wanted from the inside of the home and an additional 30 days to clear the outside. Anything he didn't want I would take care of disposing myself. This was a bit of a pain for me since there were several vehicles left on the property that did not have paperwork. Anyway, the idea behind understanding the seller's motivations and concerns and then putting together a creative offer to address them is something I learned from the @Brandon Turner book "The Book on Rental Property Investing".
Real Estate Broker · Portland, OR · Member since 2015 · 201 posts · 98 votes
8y
Great Job! Congrats on a nice profit. This is your first remodel?? Wow. Nicely done. You are very well put together and know the lingo. No winging it for you!
Good luck on the sale . Do you plan to do more flips in the area ?
Thanks! I live in El Dorado County and love the area so I would like to pursue additional flips here. I've been reading up on out of state REI and am becoming more enamoured with the idea and at some point in the not too distant future I'd like to try an out of state project. Most likely a BRRRR.
Investor · Denver, CO · Member since 2016 · 32 posts · 5 votes
8y
It looks great!
I am curious if you used a general contractor for the flip, or if you just coordinated the fixing yourself. I am looking at doing a flip in the near future and I am looking into having a company do it, or just do some of the work myself!
Shingle Springs, CA · Member since 2017 · 24 posts · 119 votes
8y
@Robert Richardson Thanks! I did a lot of homework leading up to this by reading various REI & flipping forums on BP as well as reading no fewer than 10 REI books, a couple of them twice. Eventually it became time to put it into practice! :)
Shingle Springs, CA · Member since 2017 · 24 posts · 119 votes
8y
@Jacent Pillow Thanks Jacent! Nice to see a local here. The home is a bit far out there in Swansboro so I've budgeted a longer listing period. Homes seem to be moving out there, just a bit slower than the other side of the canyon closer to Placerville. Do you invest in the area?
Shingle Springs, CA · Member since 2017 · 24 posts · 119 votes
8y
@Cameron K. Thanks! I did use a GC for ~90% of the flip and did a lot of the smaller stuff myself. Although I know I would enjoy being more hands on my W2 job doesn't afford me much time to do so.
Placerville, CA · Member since 2017 · 12 posts · 9 votes
8y
I stay away from there just because of the drive, I have to do two point turns in my long bed crew cab truck if I go Mosquito Rd. When the bridge goes in it will be a different story though. Prices will go through the roof I think! There are a lot of nice houses out there for descent prices now though.
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
8y
Awesome job!
Next time try putting your own sign in the yard for a week and see if you can't increase your bottom line 30%. You took all the risk and did all the work after all...
Investor · Lake Stevens, WA · Member since 2016 · 36 posts · 19 votes
8y
Nice work @Craig Drummond. The house turned out very nice, but most important, as you stated, is that you knew that you reached the point where you were prepared "enough" and it was time to take real action. I'm still in the preparation phase, but can't wait to follow suit and take some real action. Congrats... on to the next one!
Shingle Springs, CA · Member since 2017 · 24 posts · 119 votes
8y
@Jacent Pillow - Agree, the location is the biggest challenge I face on this one. It's a fantastic community but the drive is not for everyone. The new bridge will definitely help but that's still ~5 years out.
@Kelly Delfino - The location is 2801 Darr Ct, Placerville, CA 95667 - $395k
@Mike McDevitt - I had it on Zillow for 2 weeks before it listed and got about a call a day. But the location is tough so I decided I needed MLS to increase visibility. The $70k is after commision but I will have to pay uncle Sam his share of that.
@Jay Truong - Thanks! See the image for my paint scheme. All Sherwin William colors.
@Matthew Kimball Thanks Matthew! I would say that one of the most challenging parts of taking action was that none of the books I read with their "rules of thumb" or estimating costs seemed to apply to California where housing prices are quite high and contractors are also very expensive. I imagine that WA may be similar.