Too Good (Sunset)

So I went to the open house at https://www.redfin.com/CA/San-Francisco/2030-18th-Ave-94116/home/1299019
to see what’s up. Normally I avoid these kind of open houses because I only buy fixers, but this one is up the block from where I live and fixed up so nice so I couldn’t resist. It was a madhouse in there and everyone was complementing on what a wonderful job the seller has done. Yes, Mr. Louie, the seller, has indeed blown away half the backyard to create ample space and windows for the lower level. I met the Machine, shook his hand, and also complemented on what a great job it was. I said, wow, I’ve hardly ever seen such an extensive undertaking before! However, the machine didn’t seem impressed and said, actually I’ve seen quite a few. Well, thank you for educating me, Mr. Machine. The next time I go to one of your listings, I’ll learn to criticize some instead. :slight_smile:

1 Like

Everything inside and backyard is wonderful, but why did they paint black in the front ? It looks very odd !

1 Like

What’s your guess how much Louie spent? 200K? Can you hear the traffic on 19th?

No, 19th is not Caltrain track. You can’t hear traffic from 18th at all. You can’t hear anything from 20th either. What happens on 19th stays on 19th.

Also, I think your estimate of 200k is about right, but could be more… hard to guess the exact figure because there are so many variables. But that was no small feat for sure.

Even if Louie sells it for 2M, profit is still pretty meh for the money and effort put in.

No, he got it for 1.3M and spent 200k. So the profit could be 400k if he gets the 2M. Not a meh profit at all… that’s 2 years worth of salary for a high level IT worker, and he definitely did not put in 40 hour weeks every week for 2 years.

1 Like

Will this sell for $2M? I was thinking more like $1.7-1.8M max.

From my close monitoring, profit per flip in SV is about $250k.

Let’s calculate the cost on a 2M sale.

Louie closed in 2 weeks last year. Seems to be paying cash or hard money. So let’s say he borrowed 1.2M in hard money and put down 300K of his own cash. The extra 200K covered the rehab cost. At 10% interests rate and 2 points closing, that’s 12%.

Rehab: 200K
Cost of money: 1.2M x 12% = 144K

Property tax for 1 year: 1.3M x 1.3% = 17K
Sale commission: 2M x 4% = 80K
Transfer tax: 2M x 0.75% = 15K

So total costs = 456K

Profit: 2M - 1.3M - 456K = 244K

Rehab is probably higher than 200K. Louie has to be careful. If the house only sells for 1.8 he may even lose money.

1 Like

He bought it all cash with 1.3M. So we can deduct the hard money interest from his cost.

If Louie paid with all cash, profit will be 388K. Accounting for all the other fees and crap it will likely be 350 or less. That’s assuming he can control rehab costs to 200. I suspect 200 is too low for the work he did.

So Louie’s cash-on-cash return is 350K / 1.5M = 23%. Not bad. We should invite Louie to our forum to share some tips with us. :smile:

Right on, let’s go knock on his door :slight_smile:

1.9M. Not quite 2.0M…

Just like clockwork, Jason “The Machine” Chan collects another healthy paycheck…

No way this house can be done for 200k. In my estimation over 300k for sure. The clad front windows are already over 10k

1 Like

Guys don’t forget the 5.5% in fees when selling too

This one just sold. Looks to be better profits on this one. Has anyone seen this live? I missed it

Right. Louie lost big on this one. If rehab is 300K Louie made $0. May as well loan me the money, sit back and collect interests. Machine Chan of course made his killing.

Louie committed the number 1 sin in flipping: over-improvement. Ended up spending too much and dragged out the process too long.

Sorry who is mr Louie . Lol I understand he is the owner but is he a known guy?