Completed La Mesa Flip

Hello All,

Here is the completed flip that was purchased in November

You can see the link to the original post here;

http://pfllc.blogspot.com/2011/10/new-flip-in-la-mesa.html

As you can see the property looks vastly different now then it did before. The original plan was to build a bedroom and bathroom onto the property in order to really increase the value and when the borrower was in the process of getting permits, he decided that it was more trouble than it was worth. Unfortunately, for the borrower, there was some wasted time while he was attempting to get permits for this property and was paying interest during that time.

http://sequ.com

Completed Rehab in Spring Valley

If you are reader of my blog, you will know that our main business is hard money. When I do a hard money loan, I am always thinking of the worst case scenario; that one of my clients is not going to finish the job and I'm going to have to complete the rehab in order to sell the property or rent it out.

I think that everybody needs to put their money where their mouth is so what I decided to do is to buy a distressed property and do a rehab project myself from A-Z. Here is the deal that I put together;

$262,000 - Purchase Price
$49,258.25 - Construction Costs
$449,000 - List Price


The property is a 2,642 square foot single family home. This house consists of 5 bedrooms, 3 bathrooms and an office/optional bedroom. The property was built in 1997 but was very abused since it was built. This lot is zoned RS4 meaning it is zoned for four units. The house has a detached garage that has been converted into a 2 bedroom 1 bath house that can be easily converted back into a garage. This property has an incredible 270 degree view as well.

This property sits on a 55,000 square foot lot (1.27 acres). Most of the time when I see that there is a property with such a large lot, the case is that the lot is not buildable. This particular lot is graded and sits below grade of this house. In theory, if you were to build another house on that lot, you would not be side by side with your neighbors. I like these types of properties because the buyer has the opportunity to possibly subdivide in the future and either build another house or sell the lot. The lot that is attached to this house would sell for $50,000 right now but much more in the good times. This is a potential retirement plan for the person that decides to buy this house.

Here are some pictures of the completed product;

http://sequ.com

Completed Flip in La Mesa

A few months ago we took on a project to flip ourselves. Although I am in the hard money business and don't really take on many flips, when a "home run" property comes up, I can't help myself but to latch on to it (this was one of those deals).

The property was purchased for about $370,000, we put about $70,000 or work into this place. The property went on the market for $650,000 about a month ago and is in escrow now. 

I'm going to keep this blog posting short because the last one about this property was fairly long winded. 

Please see the completed pictures below; 

Flip in La Mesa

Unit 2

Front Unit 

Unit 3

Side of 1st unit

If you are a reader of my blog, you know that Priority First is involved in many aspects of real estate investment from hard money loans, to acquisition and now to flipping.  In this particular case, we are doing a joint venture with one of the flippers that I work with.

I found this great deal near the historic down town area of La Mesa.  This is a 3 unit property that I am in contract for at about $370,000. This is a really great deal due to the fact that this is 3 separate buildings that house one unit each. 

The main building is a Spanish Mediterranean two bedroom one bath. This unit was the original structure on the property, it was built in 1934. This unit will be the main part of the property as we will plan to sell this unit to someone that is planning to live in it. The reason that we are doing this is because the house is so charming and the neighborhood is a very nice residential neighborhood. 

The second building is a two bedroom one and a half bath. This unit was built after the construction of the main house, most likely in the mid 1940s. If you look at the picture of the second unit, you will notice that it looks like it has a 2nd story. Apparently the previous owner has put up some stairs outside of the property and had turned the attic area into a loft/additional rental. When the city came, they made the owner rip off the exterior stairs because they were not permitted. The room is still there but now has no access. Due to the fact that it's an existing part of the house, it becomes grandfathered in legally. What we will do is build a staircase inside the property and open up the loft above in order to give this an extra bedroom. When we are done, this unit will be a 3 bedroom 1.5 bath or we might just add another bathroom upstairs and make it a 3 bedroom 2.5 bath.

The third unit is in the back of the property and it is a one bedroom one bath. This is situated at the back of the lot. Normally this is not a great thing because the tenant will need to go through the whole lot to get out to the street but in this case, there is a alley way in the back of the property where the tenant can come in and out as he /she pleases. There is an additional bonus for this unit, attached to the unit there is a garage AND a car port. If the tenant has a couple cars or has some sort of desert toys, they can easily park them there.

As you can see by the pictures, this place has some serious deferred maintenance. We estimate that the property will need anywhere from $80,000 - $100,000 in work to restore it.

I think that once this place is done, we will be able to sell it for about $600,000. In the area there are two bedroom houses that are selling in the $400,000 range. If someone were to buy this property to live in, they would almost cover their whole mortgage with the rents from the units in the back.

The current rents are at $3,250, once we are done with the work the property should rent out for $4,700.