I LOVE this door!!!
Finally sold. Right at asking price of 2.45M. Flippers lost bigly.
1 Like
Why did they lose? they got asking…
Took them long time to rehab and sell. They bought last March at close to 2M. So costs of loan, tax, rehab, sales etc can easily eat up the entire paper price gain. Maybe they can eek out a small profit if lucky? Definitely a waste of time and money.
Seems to me it depends on how much they put into it with materials and time… Cost of loan… $100K. But if time and materials are $250K total, then still $150K profit.
Assuming the 150k left over, you need roughly 5% in commission on the sale. Leaves you with 27k. Personally, I would feel pretty rough about getting a 27k return on say 1mm down. It is better than losing money, but I might feel like I lost money if I had to suffer to make the cashflow and the lack of access to the down work.
Compared to the party at the N California project that took a nearly 1mm hit in the gut this is a winner!
Even if it was 150k. It looks decent on a return on equity basis, but dismal on a return on costs perspective.
There is something in particular about this circular neighborhood. It’s come up a few times before where it doesn’t perform well for development projects.
2 Likes
I assume these guys have a realtor who gives them a better rate like 1% in exchange for all your business, but a good point indeed that I hadn’t accounted for.
I’m just curious how much it would cost to do this remodel. Just my back of envelop calculation, it seems roughly $100k.
- Kitchen $15k
- Bathroom $10k x2
- Flooring $5k
- Doors and windows $25k (I assume Eichler has many windows; I don’t know what is Solarium; but just to give it some high $)
- Hvac $10k
- Paint $10k.
That is $85k.
Should be much higher than 85K. It was advertised as a down to studs remodel. You are missing:
- electrical
- drywall
- insulation
- lighting
- hardscape
- landscaping
- fencing
The numbers for paint and flooring are quite low. I posted previously about engineered flooring coming in at $10-15/sqft and I got some response back about there being only 57% flooring covering versus sqft and the fact that you could get it done for 5-8/sqft. If you get the low priced flooring and get a simple installation method you could get it completed for 5-8, but if you get the better installation by professionals and a better product it’s going to cost you more. I’ve recently seen painting quotes from the painters that work on higher end jobs and they are very close to 20k for a place just a little bigger. Of course you could hire someone cheaper.
Terri, sure you might be able to find someone to do that for you at 1%, but even Redfin charges you 1.5%. If you want a professional that does a lot of business it’s going to cost you the going rate.
My point is don’t hack things when you are taking on a project, it will end up costing you. Don’t fudge your numbers to make them work when they don’t.
1 Like
I think the appliances alone in this house are over 10K.
Best you can do is 3.5% commisson…2.5% goes to buyers agent…Definitely not a good project for the flipper…This flipper would be better off investing in something else. .Plus must value his or her time at zero…
1 Like
Not good at reading the dates of entering into a contract, but it seems to me this is a cash deal. No loans, no nothing, but still, you can get better deal putting your money into a life insurance. Trust me on that. LOL