Our 5th flip

[Jesse Lopez]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $230,000
Cash invested: $270,000
Sale price: $375,000

Bought from an old associate of mine. Home needed a full remodel. There was a flex space in the home that was used as an office that had a half bath in it. The adjacent wall of the half bath led to a closet of one of the rooms we knocked that wall down and turned it into a primary bedroom. Also, in this flip, we knocked down the wall that led from the dining room to the kitchen to open up that space to give a more open feel. Sold within one weekend over asking.

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

The area is very ideal for first time homebuyers in this part of Stockton. Each home in this neighborhood is unique, close to a massive family park, two major highways nearby, and the price point is very first time homebuyer friendly. We knew it would garner a ton of attention because of the price.

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

This was an old coworker of mine. We've had a good relationship for some years now. He called me because he was looking to sell it but asked if I would have an investor for it because he knew it needed a lot of work but wanted to close quickly because he was buying a new build. He wanted to hit a certain number to walk away with and we were able to hit that number after looking at comps and getting estimates.

How did you finance this deal?

Cash. The final purchase price was low enough for us to not have to go hard money.

How did you add value to the deal?

Turned a half bathroom into a full bathroom and turning it into the primary bedroom. Outside of that everything was new. Floors, paint, cabinets, countertops.

What was the outcome?

5 days on market with multiple offers.

Lessons learned? Challenges?

We were fairly new to the fix and flipping we used to put all of our trust into our contractor. We did things without double checking with them or even getting contracts signed. Long story short central air was never installed by contractor. Buyer calls us months later livid that we had "lied". Somehow everyone missed this. To resolve the issue we cut a check for 4k and had buyer sign a hold harmless agreement. DOUBLE AND TRIPLE CHECK ALL CONTRACTORS WORK.

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

Relationships went pretty sour after the incident. Lender on it was great Sonny Aguilar with American Pacific Mortgage.