With everybody trying to get a piece of the pie, any mention of ‘flipping’ or rehabbing is bound to send angry glances and side-eye your way. Throughout LA, property values are soaring, our burrows are being gentrified and ‘mansionized’, and many locals are no longer able to afford housing in neighborhoods they’ve always called home. While these changes are largely due to the estimated 20,000 people that move to LA every month (and the influx of foreign investors eager to safeguard their money in tangible assets), it’s no secret that developers are capitalizing on the trend - and by extension, contributing to it.
Admittedly, first time home buyers hoping to get a ‘fixer upper’ are getting the short end of the stick. For our property for example, we came up against 13 other bids - 11 of which were all cash offers. And while our bid wasn’t the highest - we still ended up paying $100,000 over asking … I can think of very few first time home-buyers with that much cash in their coffers or an extra 1k to bargain with. So, I’ll admit, it’s fair to say that developers are pushing up the prices with their seemingly limitless resources.
However, before you put it down to a lose-lose situation, consider our property: a 1,400 square-foot home built in the 1940s with a massive pit in the backyard (…we have yet to find the dead bodies...), asbestos, mildew, a cracked foundation, termite-infested beams, sewage issues, moldy carpets and wallpaper peeling off the walls. Not quite the dream home of a first-time home owner. In fact, unless you are incredibly ambitious, construction savvy and have a limitless supply of cash, time and vision- our house was quite the nightmare -completely unlivable and in need of a total overhaul.
Don’t let the many ‘Flipping for Dummies’ books or rehabbing shows fool you - while some developers may simply slap on some ‘lipstick and mascara’ - small and easy cosmetic upgrades that allow for a quick profit, rehabbing most properties requires extensive knowledge, time and resources. In fact, given the hot housing market most people who attempt to ‘flip’ a tired but move-in ready home are scarcely rewarded - the cost, time and stress involved eat up the already tight profit margins. Admittedly, flippers have a poor reputation for cutting corners, choosing flimsy finishes and materials with a short life span to keep costs low and their profit margins wider. And while this may surely be the case in some instances, a great number are producing beautiful homes that are completely and safely up to code, and conveniently move-in ready. Not every developer has plans of taking over a neighborhood and demolishing its character by building a monstrosity of a house to loom over the others. In our case for example, the house will retain its quaint character and look largely unchanged from the street. In place of the dilapidated (but character rich) shell we purchased, we will create a quality home capable of lasting another 70 years. And while there may be a few more mansions on the block, there will also be fewer homes threatening to collapse under the weight of their termite-infested structures.
For those who remain unconvinced, rest assured that thousands of terrible homes in serious need of extreme TLC are still available for your purchase… simply spend a few days going to open houses and you’ll be begging to purchase a new, turn-key ready home in no time.