FIRST TIME HOMEOWNER : FIX, FLIP & PROFIT?

Your Southern California Real Estate Journey

Welcome to Your Real Estate Future!

Southern California isn’t just a place to live—it’s a place to thrive as a homeowner. Whether you’re a first-time home buyer (FTHB) dreaming of your own space or an aspiring investor ready to flip houses for profit, this market has something for you. High demand and strong resale values make it a goldmine—if you know where to start.

In this article, we’ll show homeowners how to:

• Pick neighborhoods where $750K homes shine.

• Budget your first home or a profitable flip.

• Secure financing and manage renovations.

• Turn your FTHB equity into a future flip.

Let’s dive in—money doesn't sleep!

Section 1: Where to Start – Targeting $750K Neighborhoods

​Location is everything. A $750K sale price—called the After Repair Value (ARV)—means a neighborhood has demand, whether you’re flipping or buying to live.

Los Angeles County Hotspots:

• South Los Angeles (Inglewood, Leimert Park) Rehabbed Homes: $700K-$800K.     

Flippers: Buy distressed at $450K-$500K—gentrification fuels profits.   

FTHBs: Move-in-ready at $750K builds equity as the area grows

• San Fernando Valley (Van Nuys, North Hollywood Rehabbed Homes: $750K.

            Flippers: Fixers at $475K-$525K—suburban vibe sells fast.           

FTHBs: Affordable entry with resale upside.

Orange County Hotspots:

• Santa Ana Rehabbed Homes: $700K-$775K.   

Flippers: Buy at $450K-$500K—revitalization adds value.     

FTHBs: Below OC’s $1M median, perfect for growth.

• Anaheim (East Anaheim) Rehabbed Homes: $750K.     

Flippers: Deals at $475K-$525K—Disney proximity pays off.     

FTHBs: Jobs and fun nearby mean quick equity gains.

Why It Works:

• FTHBs: These areas offer affordability with 3-5% annual growth—

            your $750K home could hit $850K+ in a few years.

• Flippers: Distressed properties + $50K in upgrades = $200K profit potential.

• Pro Tip: Use Redfin or Zillow to find $750K comps—look for 3-bed/2-bath,

1,200-1,800 sq ft homes.

Section 2: Financing Your Dream – First Homes and Flips

​Plant Your Money Tree!

Here’s how FTHBs and flippers fund their goals.

For First-Time Home Buyers:

• FHA Loans: Just 3.5% down ($26K on $750K), 6-7% rates in 2025.

            Monthly payment: ~$4,500.

• Equity Growth: At 4% annual appreciation (SoCal average),

             your $750K home could reach $860K in 5 years—

             $110K in equity, plus principal paid, to fund a future flip.

• Pro Tip: Ask about first-time buyer grants to cut costs.

For Flippers – Hard Money Lenders (HMLs):

• Why Line Up Early?     

HMLs close in 7-14 days, beating slow offers.

            Pre-approval proves you’re ready.

• What to Bring:

  • Property: Address, $750K ARV, $475K buy price, comps.

  • Repairs: $50K estimate (e.g., $15K kitchen).

  • Experience: Past flips or a plan.

  • Exit: Sell at $750K in 6 months.

• Terms: 10-12% interest, 2 points ($8K upfront), ~$32K total on $475K + $50K.

• Pro Tip: Shop 2-3 HMLs—relationships speed up future deals.

Section 3: Renovation Reality – Costs, DIY, and GCs

Upgrades turn houses into homes & profits for homeowners.Home

Sample $50K Rehab Budget:

• Kitchen: $15K (cabinets, quartz, appliances)

• Baths: $10K (tile, vanity, fixtures)

• Flooring/Paint: $15K (hardwood/LVP, fresh coat)

• Misc./Permits: $10K (wiring, fees)

• Contingency: $5K (10% buffer)

DIY or General Contractor (GC)?

• DIY FTHBs: Paint or small fixes save cash. 

• Flippers: Cut $10K-$20K, but time drags—6 months is your limit.

• GC: $7.5K-$12.5K fee (15-25% of $50K).

Pros finish fast, and $750K buyers want quality.

Daily Oversight?

• FTHBs: Check in if renovating after move-in—small wins add value.

• Flippers: Be there daily for demo/rough-in (2-3 weeks), weekly after—catch issues early.

Holding GCs Accountable:

• Contract: Scope, 8-10 weeks, payments (30% start, 30% mid, 40% done).

• Milestones: Pay on progress (e.g., $15K after drywall).

• Updates: Daily photos/logs—stay in the loop.

• Penalties: $100/day late keeps them on track.

• Pro Tip: Vet GCs with references—$50K is tight, so pick efficiency.

Section 4: Your Money Plan – From Equity to Profits

​Here’s how it pays off—for buyers and flippers.

For First-Time Buyers:

• Buy at $750K: In 5 years at 4% growth, it’s $912K.Equity: $162K + $75K principal = $237K.

• Leverage It: Refinance or HELOC to buy a $475K flip—your home becomes your launchpad.

For Flippers – The 70% Rule:

• Max Buy + Repairs: $525K (70% of $750K).

  • Breakdown:

  • Purchase: $475K

  • Repairs: $50K

  • Financing: $32K

  • Holding: $4K (taxes, insurance, utilities)

  • Selling: $49K (commissions, closing)

  • Total: $610K

  • Profit: $750K - $610K = $140K (18.7%).

• Flexibility: $450K buy = $165K profit; $75K repairs = $115K profit.

Section 5: Your Next Steps

• FTHBs: Buy in Santa Ana or South LA, settle in, and grow equity—your flip is years away but starts today.

• Flippers: Scout deals, lock in an HML, hire a trusted GC—$100K+ profit is within reach.

• For Both: Real estate builds wealth—one smart move at a time.

Ready to make it happen? Download our Free Property Finder Checklist or join our Investor Network for insider tips.

Contact me, your humble lender!

Gerald McMillan 714-642-8711 jerry@thehumblelender.com