Fix & Flip Rehab on Small SFR in Long Beach, California

[Omar Ruiz]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $340,000
Cash invested: $80,000
Sale price: $590,000

This was a fix & flip, rehab on small single family home in good neighborhood of Long Beach, California. We saw the potential in the numbers to turn a nice profit, but didn't anticipate the length of time to get the tenants out. We had to be patient with the wholesaler and everyone involved.

What made you interested in investing in this type of deal?

The profit potential. Acquiring at a good price. Because of the tenant situation we felt that we were the right buyers for this deal as most people didn't want to deal with tenants due to the covid restrictions on evictions. We felt that deals that are more challenging would eliminate competition and present greater profits.

How did you find this deal and how did you negotiate it?

The deal was from a wholesaler. The issue was that tenants living there were not paying rent. It was difficult for them to find a new place and move out. We stayed patient with the wholesaler and after several months we split a cash for keys offer with the wholesaler to motivate the tenants to move out.

How did you finance this deal?

Hard money loan and private investors we've worked with in the past.

How did you add value to the deal?

We gutted and rehabbed entire home. Installed new roof and exterior paint with some siding. New grass and electricity in the garage. In the interior all new floors, kitchen, bath, drywall, paint , electrical, plumbing, appliances. We reconfigured the kitchen layout by removing separating walls to create an open concept kitchen and add walking space. We hired a designer that presented an idea of a peninsula counter top seating area. We also added washer/dryer hook ups.

What was the outcome?

We home came out looking fantastic and we increased the value to be able to sell at $590,000 from a purchase price of $340,0000. We made a nice profit and our investors got a good return.

Lessons learned? Challenges?

Our initial contractor started of great, but over time spread himself thin and caused delays. We fired him and finished the job with a new crew that has worked with us on other projects ever since.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Arbor One Escrow is a great company that's very investor friendly. Pivotal Capital was our hard money lender.