Rehabbing a slab house requires extra work

[Cheri Cybulski]

Investment Info:

Single-family residence fix & flip investment in Novato.

Purchase price: $500,000
Cash invested: $150,000
Sale price: $770,000

Tax records showed 4 bed/2 bath, approx 1800 sqft home with garage built in 1954 with an addition in 1964. Current code would not allow added bedroom as it had access to the garage. The master and the smallest bedroom had been combined. It was an inheritance, appraised at $500K. We moved the kitchen, the kitchen became the master and added a bathroom, turned the main bath into a powder room and laundry room, put the wall back up between the bedrooms. The slab had to be opened for new plumbing.

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

It was an opportunity to see if we could actually flip a house.

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

This was my mother's home and while I was the trustee, I did have to convince my brothers and sister to participate by using their money.

How did you finance this deal?

Inherited funds and a loan from one of my brothers.

How did you add value to the deal?

I acted as the general manager, getting the permits and purchasing all of the fixtures and electrical requirements.

What was the outcome?

The house was sold for $770K so all of the invested money was returned and each beneficiary received a nice increase to their inheritance.

Lessons learned? Challenges?

My husband, who is a professional, did most of the work himself to keep costs down, but due to the scope of the project we should have hired more laborers. Never borrow equipment, rent it. Opening up the slab was messy and the dust hung around. The floors, plumbing and electrical were subbed out and I should have had more oversight of these items. Small mistakes but small mistakes add time. I will never put the floor in until the very last thing, keeping it clean was way too time consuming.

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

I am an agent.