All Forum Posts by: Peter Hanson

I don't post that much on here but I am trying to post more and interact more so here goes.  I'd like to share my most recent completed flip deal.  The home was a 1927 Spanish style home in Los Angeles, CA. It had good bones but it needed to be redesigned and completely remodeled inside and out. 

I have been listening to the podcast almost every day for the last few months and it's a great source of information and motivation so I wanted to share my most recent success in hopes I can meet people who can help me grow my business.

My name is Peter Hanson and I am a self employed Real Estate Appraiser and Real Estate Broker in Huntington Beach, CA  I watched investors make a lot of money for many many years so I finally saved enough money to start flipping homes. I did my first flip in 2012 in Fontana, CA. I paid $85,000, spent $14,000 on rehab and sold it for $135,000. I was immediately hooked on flipping. 

I found my most recent flip in Los Angeles, CA in a trendy, gentrifying area and thought I had a chance to make some good money. I bought it on 12/22/2017 for $510,000.  It was fixed and just closed on 6/14/18 for $759,000.

Breakdown/Deal Numbers:

Acquisition Costs (AC): $525,000

- Purchase Price: $510,000

- Closing Costs: $15,000 (hard money points and fees based on $408,000 loan amount)

Rehab Costs (RC): $80,000

Monthly Mortgage costs: ($2890 per month for 6 months = $17,340)

- Utilities: $600

Selling Costs:  2.5% (as a Broker I listed the home myself and saved the other 2.5%)

 Sales Price (SP)  $759,000 closed 6/14/18

- Commissions to Selling Agent: $18,975

-Selling costs (property taxes, title, escrow, etc) $8,000

Total Net Profit: $109,085 – Taxes & Any Additional Selling Costs

- $759,000(SP) - $26,975(SC) - $17,940(HC) - $80,000(RC) - $525,000(AC) = $109,085

Before:

After:

Thank you for reading. I would love to hear your thoughts and feedback. What could I have done different or better?  

@John Lee -  I am only flipping, too far for me to manage/air bnb.

yucca valley flip should be done in a week, 29 palms should be done in a few months, have not started that one yet.

numbers on yucca: paid $82K, evicted tenant, spent $60K on rehab, will be listing for $249,900

numbers on 29 palms: paid $63K, will spend 40K on rehab, will be listing for $149,900

just sold a house in Los angeles, paid $510K, spent $80K on rehab, sold for $759,000, netted $113,000 (first ever flip to net over $100K, so pretty excited about that one)

trying to get these flips done, should have about $1,000,000 in cash after these are completed and sold, planning to pay off 2 rentals and buy 2 more flips in Los Angeles

let's keep in touch, what are you guys doing?

I have just purchased my 2nd home in this area. I'm wondering if anybody else if flipping or buy/holding in these areas.

I'd love to net work with people who buy/rehab in these areas

Great work and beautiful end product!  Great numbers and quick timeframe. Great work again. 

@Jarvis Smith I will update with more info, before, during and after photos.  I hope it goes as well as projected.   thank you.

@Tony Han  hi tony,  the house was an off market deal sent to me by a wholesaler who I have done business with in the past.  I had to get out there same day and make an all cash offer which I later changed to hard money

hi BP,

Just wanted to share a deal I have going right now.  I paid $440,000 for a house in the Silverlake area of Los Angeles.  The current layout is a 1 bed/1 bath. My plan is to redesign the house and make it a 2 bed/1 bath with indoor stackable laundry and a large living room/dining area/kitchen space. We moved the front door over a few feet to allow for more kitchen cabinets and the entire inside and outside will be renovated and new. There is also a 16' x 14' 1 car garage which I will be turning into a office/garage/studio flex space. That can be rented out for additional income (zoning is R3) for the new owners if desired.  Market rent for the studio would be about $1100-1400/month in my opinion. Market rent for the house would be $3,000-$3,200 in my opinion as well.  I will not be keeping this one, I will be listing it for $679,990 and hope it sells pretty quickly.

Total price paid was $440,000 and $4,000 cash for keys to get the tenant to move sooner than 60 days. Rehab is estimated at $53,500 but I think it will be closer to $60,000 which includes permits, inspections, staging, photos, etc. Remodeled comparables range from $660,000 - $800,000 in that area and usually sell pretty quickly once staged and listed on the MLS.

I put down $45,000 and got a hard money loan for $396,000 (monthly payments are $2805). I estimate 4-5 months for the entire project.  If all goes well the profit could be north of $125,000, which would be my largest deal to date.

hi Daniel, Congrats on a successful flip!  you have "cajones" mucho larger than I do.

if your goal is $35,000 profit maybe you could look in less expensive areas next time so you don't have to have so much money tied up.  Here in So. Cal I shoot for 20-40% return on my flips because you never know what happens or what hidden expenses you will discover during the rehab.  It looks like you had an approx. 6-7% unleveraged return which would make me very nervous.   

it's good your first flip went so well, congrats again

Hello all I have been an appraiser for 11+ years and also have my real estate brokers license. I have purchased, rehabbed and sold over 30 properties and have 7 buy and hold rentals right now.

My goal is to purchase my first commercial real estate apartment building of 5-20 units . I'd like to buy it in he next 3-6 months 

I'd like to purchase creatively with seller financing or assumable financing and a lot of upside in rents. Vacancies and rehab are preferred. I want to buy a diamond in the rough and make it great again

@ What kind of marketing has been done - its on the MLS, it's listed by my cousin (who managed the rehab) but there is no marketing being done at all besides the MLS. My cousin or I should hold an open house so I can get some feedback on the house and the list price. It is totally vacant, staging might help some, but I have not had any calls or showings in weeks so staging might not help at this time. Thank you for your feedback, it is much appreciated.

@ its in a remote area just south west of Desert hot Springs, there are no comps for 2-3 miles, and it's the only house in 10 miles on a dirt road. That being said there is not a lot of competition in the area, homes usually sell in 10-60 days in this area

@ it's being marketed at $85/SF which is on the low end of $80-$120/SF for the area. Its on the MLS, it's vacant with no staging at present. The area is remote and on a dirt road, I think it will take time or I need to reduce the price, thank you so much for your feedback

Pete