our first flip in Los Feliz area of Los Angeles, CA

[Christopher Janney]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $650,000
Cash invested: $130,000
Sale price: $960,000

First project, we spent way more than we would now, especially on the hardsape, but the hardscape is really what sold the house. The backyard was completely redone, new retaining walls, side garden with automatic watering, etc. The outside of the house, left the roof, which was in decent shape, fixed all the original wood windows and painted them, added mini-split HVAC system and removed the gas wall heaters, paint and wall repair inside, back powder room taken down to the studs, new lighting throughout.

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

This was our primary residence, and the market was heating up. I saw this as an opportunity to see if rehabbing was something we could do. The answer is yes.

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

This was our primary residence. We could have done a lot better, knowing what we know now.

How did you finance this deal?

The property was through a traditional loan broker. Lessons were learned. The rehab was done through taking a margin loan against our stocks. At 4.5%, this made a lot of sense. Still does.

How did you add value to the deal?

Ha! That's a good question. Well I *added* value due to my experience managing visual effects and software development projects; creating scopes of work, managing timelines and resources. We went over budget, but due to changes we wanted to make (that pergola!)

What was the outcome?

We made a very decent profit, then turned around and invested it in our education in the business, and all the startup costs (creating an LLC, getting filings all sorted, etc).

Lessons learned? Challenges?

1. Everything is negotiable. I would have been far more tight on our spending, knowing what I know now.
2. Get contractors to bid against each other
3. Get references
4. Your time is worth more than the person you can hire to hang drywall, so pay them and step aside.

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

YES! I worked with Louise Leach and Juan Longfellow from Deasy Penner in the Los Feliz area of Los Angeles CA. They were fantastic. Louise has a great eye and helped us stage. Both helped scrape paint off windows. Friends for life.