2nd Flip...Entire home remodeled. Successful outcome!

[Richard Goore]

Investment Info:

Single-family residence fix & flip investment in Sacramento.

Purchase price: $520,000
Cash invested: $520,000
Sale price: $750,000

Great location in East Sacramento - 2 bedroom/1bath, 1373 sq ft. This was an off-market purchase from a wholesaler as a fix-n-flip. Took 6 months to rehab the entire home - new kitchen, bathroom, added a 3rd bedroom, new flooring throughout and new paint inside/out. My investment partner and I did a majority of the work ourselves. We hired out for the drywall, trim work, kitchen countertops and flooring. Came in just under our proposed budget!

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

I had been looking for a flip opportunity for a number of years but hadn't found the right deal for me. I have flipped a condo in Lake Tahoe but the level of work needed was significantly less. That is now a STR.

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

I am on a bunch of wholesale lists and was contacted by one of the wholesalers about a property he was helping another wholesaler with. I think the guy who got it under contract didn't have a network in Sacramento. The guy I was contacted has a small network. I think I was the only one who viewed the property but I am not sure. My investment partner and I viewed the property, came up with a rehab budget and made an offer for less than what they were asking. I got lucky with this one!

How did you finance this deal?

Cash on hand and used other personal finances to loan the money to ourselves.

How did you add value to the deal?

I knew it was a large 2/1 on a good sized lot in the heart of East Sacramento. It was totally original. We added a bedroom by taking a corner of the very large family room (35'x35') and framing out an additional room. We remodeled everything including a new kitchen, new bathroom, and everything else.

What was the outcome?

I listed it for sale on July 5, accepted an offer within 2 weeks and closed on August 7. It was a 2 week escrow with a cash buyer.

Lessons learned? Challenges?

I learned that I don't want to flip another home where I need to do that volume of work. We did create some great contacts with various tradespeople. I will plan to use them for both future flip projects as well as refer clients to them.

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

Yes....MYSELF! I do work with great lenders and have a great title company that always takes care of me.