My First House Flip in the Bay Area, CA: Challenges, Numbers, and Lessons Learned

[Kevin G.]

I am two weeks into my first house flip. I started the business a couple of months ago and it took us around 50+ offers and lessons learned to finally secure our first house in the Bay Area, CA. The market here is insane for any type of investment.

Let me share the numbers with you:

• Purchase Price: $480,000
• Rehab: $63,000 (Includes 10% cost overrun)
• ARV: $650,000
• Profit: $46,000 (This is good for the Bay Area)
• ROI: 54.8%
• Expected holding time: 2 months

We have already encountered several problems during the first two weeks of this project. Firstly, our contractor decided to charge a higher labor cost once starting the project. The mistake here was not getting the estimate in writing or having a contract. However, we decided to continue with him to avoid wasting time finding another contractor, as most general contractors have poor communication or tend to disappear.

Another issue we've faced is with material choices. Initially, we had a modern design in mind, but our contractor suggested cheaper items, particularly for the flooring. Unfortunately, it didn't turn out as good as we expected. In the future, I will trust my gut and stick to the original design. The cost savings weren't enough to justify having lower quality flooring.

Despite these challenges, everything else is going according to plan. As long as my team can complete this project in three weeks, we will be ready to resell it.

What's next for me?

Flipping a house has been an invaluable experience, and I'm already searching for my next project. Additionally, I'm compiling extensive data on real estate deals across the country for an educational endeavor called Dealsletter. If you're struggling to find good deals or simply want to stay updated, feel free to reach out!

I would love to hear your thoughts on my journey and the lessons I've learned. Any feedback or advice for my next flip would be greatly appreciated!

Cheers, Kevin