Flipping Homes- My Exciting Journey (Post 3 of ?)

[David Friedman]

Hello BP!

I've started posting all of my previous flips, now that I feel like I've completed enough to actually have some good original content. I hope that by sharing we can all learn, network and discuss this interesting business!

Link to my previous posts: Flipping Homes- My Exciting Journey (Post 1 of ?)

Flipping Homes - My Exciting Journey (Post 2 of ?)

3rd Property: 930 Northpark Blvd, San Bernardino, CA

This was another pretty easy property to rehab. I actually don't have any before pictures because it was a flip house prior to us buying it at auction. Deals don't always go perfect though and this one had its challenge while in escrow with the buyer. Here are the details:

Purchase Price: $210,000

Received Commission: $0

Estimated Rehab: $15,000

Estimated Time Frame: 3 months

Sold Price: $260,000

Actual Costs: Approximately $11,260 with escrow fees, carrying costs and rehab. (There were no buyer's agent fees as we found the buyer).

Net Profit: $38,740 or 17.5%

Before Pictures: (None, Sorry). The house was almost ready to sell from the day we bought it due to it being flipped 3 years prior. We had to rehab some concrete, bathrooms, carpet and paint, but nothing complex.

What I Learned:

- It's best not to involve people you personally know as buyers of your investment property. If you have to make a business decision, such as canceling the deal, it makes it much much harder.

- Looking for properties that were previously flipped a couple of years ago can have profound savings when you rehab.

- Again, staging and great pictures will sell a home.

After Pictures:

Summary:

This was the first house that we bought at auction. We hadn't learned how the auction works yet, so we paid a well-known friend to buy us this first property. The friend has been doing this for over 20 years now. This was also the first time that we dealt with the owner still living in the house. We were cautious and consulted an eviction attorney in San Bernardino before proceeding.

We served the owner a 3 day notice and he called us immediately. We paid him $1500 cash for keys to move out in one month and everything went very smoothly. Since then, I have a different strategy for moving people out, but we can talk about that in later posts. We prefer anything else to eviction and only use eviction as a last resort. Obviously the previous tenant or home owner are in a fragile state and using force can actually cost you more money in the long run if they decided to damage the house.

Now, the story with the buyer. We helped a client to sell a two-story house in Fontana and she was looking for a one-story house in the North San Bernardino area. It just so happened that we were flipping this house at the same time and so we decided to sell it to her. She was approved for a loan of this size, but she didn't make us or the lender aware that she had some medical debt. We stuck through it and after 6 months we sold the property to her. It took way too long for this home to sell, but we saved money by not paying a buyer's agent. In the end, everyone was happy. It could have happened to any one of the buyers of our properties, but it just so happened to be one that we chose. I would not do it again. It is much harder to make business decisions when you know the person it affects.

Finally, the home appraised at $250,000 even though we had several offers at our asking price, not to mention the upgrades that were above and beyond the average home in the area. We fought the appraisal and won. We sent a letter to the appraisal company justifying the price and they adjusted the appraisal value to $260,000. Don't give up immediately. This job comes with many many obstacles. Although the rehab was easy, the deal itself was not.

I will try to post more previous flips as I have time. If you think I can improve on the formatting of the post or if you think I am leaving out crucial information, please let me know. I will try to answer every question.

Keywords: Inland Empire California Flipping Flip Cash Investor Rehab Investment Redlands Yucaipa San Bernardino Highland Ontario Colton Riverside Moreno Valley Beaumont Banning Palm Springs IE SoCal Southern California Rialto Fontana Corona