My First Flip in Bakersfield, CA

[Fred Herrman]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $210,000
Cash invested: $265,000

3 Bedroom, 2 Bath, 1600 square feet, single family residence within city limits, on sewer, in residential neighborhood.

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

I wanted to find a property to improve that had a good foundation and structure, but needed a lot of cosmetic work.

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

I found it on the MLS. It was nearly 5 years with taxes not having been paid after a death on the property. I purchased it mere days before it was going to auction.

How did you finance this deal?

My own cash.

How did you add value to the deal?

I comped area property using my own access to the MLS, being a real estate sales agent.

What was the outcome?

I didn't make much money, but the most valuable aspect of the experience for me was learning how to find crafts people, acting as my own general contractor, and then learning what order in which to do repairs and improvements.

Lessons learned? Challenges?

After selling the property, I determined that I didn't purchase it for low enough in price. I didn't know the 70% (and then subtract out repair costs) rule. So my purchase price should have been more around $150,000-$160,000, considering it needed about $30,000 in repairs. The other lesson I learned is that the right fit for me in this investing process is to long term hold the properties I purchase, rather than flip them, unless market conditions are so good that flipping makes sense.

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

Just myself, and the title company that I use, Orange Coast Title.

[Fred Herrman]

Thank you, Eric!