My first flip

Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes

3mo

"My worst case scenario is I put in all that work and break even."

No that's incorrect - your worst case scenario is not to break even. The worst case is always that you lose money. Always.

You sound pretty confident and of course we all wish you the best....but jacking up foundations is not the same as what you are embarking on here.

Your scope is already increasing (as it always does, lol) so I would definitely plan for a + $50k rehab budget. As a long-time GC and Investor, my advice would be to keep this project legit. 1) Get permits as needed, 2) only use Licensed Sub-Contractors, 3) Hire legal employees 4) Get Workers Comp. 5) Get an Engineer to Certify everything in writing, so you have it for resale.

Ask me how I know all this stuff ^^^^

1 Reply

Eric Mcginn

OP

Real Estate Investor · Chico, CA · Member since 2016 · 248 posts · 105 votes

3mo

Thank you all for the additional insight!

Roof is done ❤️

And it is BEAUTIFUL. what a difference compared to rusty old galvanized.

up next is siding. I flip flopped for a while but finally settled on LP smart smartside.

HVAC is all paid for and will get installed (by myself) after siding so that I can finish the inside comfortably as we enter summer!

Total cost for the roof was $2k all in

I had $12k in budget

I’ve run into plenty of additional problems and they have cost me additional time and a little extra money. But $1100/month carrying cost balances just fine when you consider all the labor cost im saving.

Moonlit black “cool roof” architectural shingles with charcoal 2” drip edge is looking great! Excited to see the siding go on and see how the clary Sage looks in person.

I also decided on butcher block which will save $3k compared to the $4500 I had budgeted for quartz. So far I have about $14k in. And I can’t see much more than abother $10k at this point even including appliances. I’ll securely be under $30k

And as far as sale price, I’m feeling confident at $300k!!
$265k is the absolute worst case scenario as far as multiple realtors figure.
Inventory on market has nothing under $300k.

2 Reply

Garrett CrosbyPro Member

Real Estate Agent · Los Angeles, United States · Member since 2021 · 392 posts · 162 votes

3mo

Love seeing the progress updates on this. The budget tracking and decision-making in real time is exactly what most people don't document but should.

The butcher block vs quartz call is smart. On my flip in Fayetteville, NC (bought for $123k, sold for $300k), one of the best decisions I made was choosing finishes that were clean and modern but not premium. Buyers at the $265k-$300k price point in most markets don't need quartz — they need everything to look fresh and nothing to feel dated or cheap. Butcher block can actually photograph really well and feel intentional rather than a budget cut when it's done right.

A few things that bit me or that I was glad I caught early: (1) Budget a real contingency, not just on paper. Things come up in the last 10% of a flip that you don't see coming. I'd keep $5-8k unallocated until you're into final punch items. (2) The listing price psychology at $300k matters a lot depending on your market — in some areas that's a clean number, in others you want $299,900 or even $295k to hit a search bracket. Worth a conversation with your agent before you settle on the number.

Sounds like you're running this well. Post the final numbers when you close — always good to see the real P&L at the end.

[email protected]

0 Reply

Eric Mcginn
OP
Real Estate Investor · Chico, CA · Member since 2016 · 248 posts · 105 votes
2mo
Quote from @Garrett Crosby:

Love seeing the progress updates on this. The budget tracking and decision-making in real time is exactly what most people don't document but should.
The butcher block vs quartz call is smart. On my flip in Fayetteville, NC (bought for $123k, sold for $300k), one of the best decisions I made was choosing finishes that were clean and modern but not premium. Buyers at the $265k-$300k price point in most markets don't need quartz — they need everything to look fresh and nothing to feel dated or cheap. Butcher block can actually photograph really well and feel intentional rather than a budget cut when it's done right.
A few things that bit me or that I was glad I caught early: (1) Budget a real contingency, not just on paper. Things come up in the last 10% of a flip that you don't see coming. I'd keep $5-8k unallocated until you're into final punch items. (2) The listing price psychology at $300k matters a lot depending on your market — in some areas that's a clean number, in others you want $299,900 or even $295k to hit a search bracket. Worth a conversation with your agent before you settle on the number.
Sounds like you're running this well. Post the final numbers when you close — always good to see the real P&L at the end.

Thank you for the support!
Yea, regarding money, I hear you. I’m starting to feel it. Cash is stretched thin. It doesn’t help that two of my tenants stopped paying and I’m having to evict one.
And carrying costs are eating away at my too, not just the $1100/ month loan but utilities, WiFi for my security cameras, food.
allll the little things from Lowe’s, insulation, electrical connectors etc etc
And I swear every thing I look into is another problem.
But I’ve always got a solution!!
So the siding I finally settled on LP smart side 8” lap on the back and addition. And I found the match to the original double lap pine siding at a local yard for a decent price so I will keep the front and more visible side all original siding.
I got some more help from my nephew and my Father in law came with his tractor so the property is cleaning up beautifully! We’ve hauled off a total of about 8k lbs of trash and yard waste. All for a cost of ~$300!! thank you Butte County landfill!
1 Reply
Eric Mcginn
OP
Real Estate Investor · Chico, CA · Member since 2016 · 248 posts · 105 votes
2mo
Quote from @Eric Mcginn:

Quote from @Garrett Crosby:

Love seeing the progress updates on this. The budget tracking and decision-making in real time is exactly what most people don't document but should.
The butcher block vs quartz call is smart. On my flip in Fayetteville, NC (bought for $123k, sold for $300k), one of the best decisions I made was choosing finishes that were clean and modern but not premium. Buyers at the $265k-$300k price point in most markets don't need quartz — they need everything to look fresh and nothing to feel dated or cheap. Butcher block can actually photograph really well and feel intentional rather than a budget cut when it's done right.
A few things that bit me or that I was glad I caught early: (1) Budget a real contingency, not just on paper. Things come up in the last 10% of a flip that you don't see coming. I'd keep $5-8k unallocated until you're into final punch items. (2) The listing price psychology at $300k matters a lot depending on your market — in some areas that's a clean number, in others you want $299,900 or even $295k to hit a search bracket. Worth a conversation with your agent before you settle on the number.
Sounds like you're running this well. Post the final numbers when you close — always good to see the real P&L at the end.

Thank you for the support!
Yea, regarding money, I hear you. I’m starting to feel it. Cash is stretched thin. It doesn’t help that two of my tenants stopped paying and I’m having to evict one.
And carrying costs are eating away at my too, not just the $1100/ month loan but utilities, WiFi for my security cameras, food.
allll the little things from Lowe’s, insulation, electrical connectors etc etc
And I swear every thing I look into is another problem.
But I’ve always got a solution!!
So the siding I finally settled on LP smart side 8” lap on the back and addition. And I found the match to the original double lap pine siding at a local yard for a decent price so I will keep the front and more visible side all original siding.
I got some more help from my nephew and my Father in law came with his tractor so the property is cleaning up beautifully! We’ve hauled off a total of about 8k lbs of trash and yard waste. All for a cost of ~$300!! thank you Butte County landfill!

1 Reply

Eric Mcginn

OP

Real Estate Investor · Chico, CA · Member since 2016 · 248 posts · 105 votes

2mo

0 Reply

Eric Mcginn

OP

Real Estate Investor · Chico, CA · Member since 2016 · 248 posts · 105 votes

2mo

I feel like I’ve finally rounded the corner on this one, but I have a LOOONG ways to go still. Here’s a good before and after of what I’ve done so far!

0 Reply

Jaron WallingPro Member

Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes

2mo

@Eric Mcginn Amazing progress man! Hopefully you can get it listed sooner than later.
Don't make the mistake we made. We listed our 1st flip last year in mid October which was way to late. Ending up holding into the spring which ate into our profits.

2 Reply

Eric Mcginn
OP
Real Estate Investor · Chico, CA · Member since 2016 · 248 posts · 105 votes
2mo
Quote from @Jaron Walling:

@Eric Mcginn Amazing progress man! Hopefully you can get it listed sooner than later.
Don't make the mistake we made. We listed our 1st flip last year in mid October which was way to late. Ending up holding into the spring which ate into our profits.

Dang that’s a good point. finishing for September is gonna be tough for me, but maybe that should be my goal.
0 Reply

Chris SeveneyBusiness Member

Moderator

Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes

2mo

Quote from @Eric Mcginn:

I’m under contract on my first flip.
also, this is my first time acting as my own agent. I’m now a licensed California real estate agent and I can do transactions cheap! Side note, hit me up if you need a hand listing or buying! DRE# 02283361

So it’s a cute little house, only thing in town (Chico) for under $300k. But it needs the works. Floors have some saggy parts, same with roof. No hvac, appliances, not even a water heater lol. Plus all the cosmetics inside and out.
it’s more of a project than I wanted, but it’s the only project in town I can afford. Anything else would be a 30+ minute commute to Oroville or Durham. And I have a 2 and 4 year old and do day care drop off so that would make it tough time wise.
So I’m going for this one. I’m basically going all in as far as cash goes. I do have some rentals I could leverage but prefer not to.
Fo the Ease and speed I'm doing hard money. Financing costs will be about $12k all in over 6 months including interest. Maybe next time I'll line up a HELOC.

I’m an agent so I save commission on both sides. I’m doing all my own work, basically buying myself a full time job with flexible hours haha.
Conservative Reno budget is $50k but I’m shooting for half that.
Sales price will be $130k plus closing costs.

But ARV is a wild card. The immediate neighbors are horders and involved with drugs. They burnt down their house and rebuilt a shanty shack.
I’m gonna do what I can to limit the visibility. Maybe offer to build some fences for them.

If not for the neighbor it would be an easy $275k but I’m planing on $225k instead. Break even will be around $200k. I figure if everything goes terribly wrong, it will be a really good lesson and I’ll make my money back at least.

I always fall back to the first rule of real estate, location location location. Why are you forcing a deal next to drug dealers? Do you think people are going to want to buy this property?

7e investments53 Reviews

Website View Page

1 Reply

Eric Mcginn
OP
Real Estate Investor · Chico, CA · Member since 2016 · 248 posts · 105 votes
2mo
Quote from @Chris Seveney:

Quote from @Eric Mcginn:

I’m under contract on my first flip.
also, this is my first time acting as my own agent. I’m now a licensed California real estate agent and I can do transactions cheap! Side note, hit me up if you need a hand listing or buying! DRE# 02283361

So it’s a cute little house, only thing in town (Chico) for under $300k. But it needs the works. Floors have some saggy parts, same with roof. No hvac, appliances, not even a water heater lol. Plus all the cosmetics inside and out.
it’s more of a project than I wanted, but it’s the only project in town I can afford. Anything else would be a 30+ minute commute to Oroville or Durham. And I have a 2 and 4 year old and do day care drop off so that would make it tough time wise.
So I’m going for this one. I’m basically going all in as far as cash goes. I do have some rentals I could leverage but prefer not to.
Fo the Ease and speed I'm doing hard money. Financing costs will be about $12k all in over 6 months including interest. Maybe next time I'll line up a HELOC.

I’m an agent so I save commission on both sides. I’m doing all my own work, basically buying myself a full time job with flexible hours haha.
Conservative Reno budget is $50k but I’m shooting for half that.
Sales price will be $130k plus closing costs.

But ARV is a wild card. The immediate neighbors are horders and involved with drugs. They burnt down their house and rebuilt a shanty shack.
I’m gonna do what I can to limit the visibility. Maybe offer to build some fences for them.

If not for the neighbor it would be an easy $275k but I’m planing on $225k instead. Break even will be around $200k. I figure if everything goes terribly wrong, it will be a really good lesson and I’ll make my money back at least.

I always fall back to the first rule of real estate, location location location. Why are you forcing a deal next to drug dealers? Do you think people are going to want to buy this property?

There aren’t drug dealers. It’s getting cleaned up, but regardless, yes people want to live there. Like you said, LOCATION. 1/2 mile from Sierra Nevada brewery, 1/2 mile from the fair grounds, 1/2 mile to the free way, it’s in town and 1 mile to downtown.
the location is clutch. The neighbors are hoarders. But my property is large and fully fenced. It’s safe and quiet.
0 Reply

Bruce WoodruffPro Member

Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes

2mo

Good progress! Just my opinion, (but a proven one :-), add a window or 2 in the front, you have virtually no light coming in the front of the house! Get a couple of 3'0" x 5'0" vinyl windows at HD and slap 'em in there. You're going to have trouble finding a good buyer anyway, might as well make the place as nice as possible.

Just my $.02....

1 Reply

Eric Mcginn
OP
Real Estate Investor · Chico, CA · Member since 2016 · 248 posts · 105 votes
2mo
Quote from @Bruce Woodruff:

Good progress! Just my opinion, (but a proven one :-), add a window or 2 in the front, you have virtually no light coming in the front of the house! Get a couple of 3'0" x 5'0" vinyl windows at HD and slap 'em in there. You're going to have trouble finding a good buyer anyway, might as well make the place as nice as possible.
Just my $.02....

That’s the back of the house! Laundry room and a closet. The rest of the house gets excellent light and I’ve opened up the living space. It’s quiete spacious feeling inside and the layout is fantastic.

Look at this house!! So cute! It’s gonna be PERFECT!

2 Reply

Jaron WallingPro Member

Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes

2mo

@Eric Mcginn That location sounds great. If you have a dumpster on site (or plan to) I'd offer to let them dump a few things. Hoarding doesn't go away easy. As other's have stated the neighbors property is a big risk to your sales price. You can't control it or "swing hammers" out of the situation. I would price that risk into your numbers.

Offering to help the neighbor is a win-win. It could even create a buying opportunity if they wanted to sell. The second property I purchased was a hoarder-ish property. The previous owner was renting to a family member and things got out of control. They were filling a dumpster when I walked up and broke the ice. We bought it off market 2 months later.

1 Reply

Garrett CrosbyPro Member

Real Estate Agent · Los Angeles, United States · Member since 2021 · 392 posts · 162 votes

2mo

Eric, the cleanup progress is huge, and honestly getting 8k lbs of junk off the lot for $300 is a great return on effort. On the neighbor issue, a solid fence line and clean curb appeal on your side will do more to neutralize that than people expect — buyers react to what they can see from the street more than what they know is next door. Keep pushing, it sounds like you're close to turning the corner. Reach out anytime if you want a second set of eyes as you get closer to listing.

[email protected]

1 Reply

My first flip

My first flip

Most Popular Reply

62 Replies