Cassandra Chase Rehab Deal

 

Cassandra Chase Rehab Deal

Chase N\' Properties, Inc in Los Angeles, CA

I bought a 100+ year old craftsman home in an up and coming part of South LA requiring a large remodel to meet a modern sophisticated buyers needs. The project took 8 months to complete from when we bought and sold it, two of those initial months were negotiating a partner buyout before construction began. Overall the project turned out well and the time delay only ended up helping us hit the market during peak summer time.

Rehab Details

Property City: Los Angeles
Property State: CA
Purchase Price: $390,000
Repair Costs $116,000
Holding Costs: $31,000
Sale Price: $763,575

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Case Study

How did you find and structure the financing of this deal?

I found this deal on the MLS. I invest heavily in the area and recently sold another property in the area for a record breaking high. With that I understood the true demand in this area for custom remodeled homes. When this property hit the market I placed an offer knowing what the potential could be which others most likely did not see. My offer was accepted for being the highest offer. As for financing, I structured the deal with a JV financial partner with a 60/40, 40% coming to me for taking a wholesale fee upfront. Purchased for $390,000 then wholesaled to me and another partner for $425,000. Then we secured a hard money loan for $380,000 who funded to a second escrow that was handling the wholesale transaction and they then transferred the funds to the original purchase escrow with the 3rd financial partner funding the remaining amount needed to close.


Provide a summary of the repairs and improvements you made to the property.

The property was in major need of repairs after being the local neighborhood hangout for gangs and drug addicts. The property smelled of urine, walls were filled with graffiti and the home had dead animals inside and outside of the house. On top of being neglected, the property was built in 1912 and had major foundation issues, all systems needed to be replaced and the layout was not conducive to a modern buyer. We completely gutted the interior, opened walls, installed all new plumbing, electrical, HVAC, framing, windows, doors, modern flooring, cabinetry, fixtures and created a true master bedroom with en suite. Additionally, we upgraded all the fencing surrounding the property and the landscaping.


How did you find a buyer for the property if you sold it?

We listed the property through my real estate agent who I use often and within the first week we had multiple offers. The winning offer ended up being a couple who used an escalation clause offering $6,570 over the highest verified offer.


What are some of the major lessons learned that you would like to share with other students that they can learn from?

When I first purchased this property I took on a strategic partner who ended up not performing and was at risk of being sued by other investors for other matters, only found out after purchasing this project. This property was sourced by me but put under his company name. After purchasing the property, he became unresponsive and unable to fulfill on his roles on this project so this delayed the construction process and required me to buy out his share costing more money and an extra 2 months before work really began on the home. I would recommend others truly vet their potential business partners or JV partners and put in place parameters for when one does not perform on their duties.




Before & After Photos