Unbelievable Luxury Home Flip

[Cindy Cabrera]

So! Just a quick introduction, my focus in real estate is primarily to invest in large multifamily. However, a shiny object caught my eye and I can't get it off my mind. I would like to see what experienced flippers have to say about it. The home is located in a highly regarded neighborhood and it is in a beautiful gated community. You drive in and the complex is only 14 homes that are each over $1MM- average of $1.2MM. The house is currently for sale at $670k which is far above the price that the deal would make sense. The square footage is 1,500 short of that of the average home in the complex and it is in serious need of major construction including possibly adding a second floor. Picture a house for junkies in a luxury home neighborhood- a true finding. We are looking into $450k in construction and remodeling costs and the buy in would be at $400k. Total net profits would be about $300-$400k and turnaround time approximately a year, depending on real estate values and if home prices drop due to the COVID-19 aftermath. If so, we would rent out for some time until values went up again so that would not be a problem. 

My question is- do i make an offer before having my team set in place or do I form a team for doing the repairs and then put in the offer? Another issue I am running into is there is a HOA so the repairs would not only need to be cleared by the city but also by the HOA. I don't see this being a problem since it is truly an eyesore to look at when driving in, but I would like to know what steps I should take next and in what order.

Any guidance is greatly appreciated! Thank you!