The housing market of Southern California has been on a long post-pandemic rise that will continue, reports say. Median home prices in the area have now risen for the 13th month in a row. Los Angeles is no exception to this trend — the median price of $731K was 18.9% higher this summer, compared to the same season last year, according to Norada.
The real estate landscape of Los Angeles would not be complete without fixer-uppers and house flipping projects. And in this economy, turning to fixer-uppers is often a good idea for both homebuyers with tight budgets and small investors looking for a handsome profit.
If you’re sold on the idea yourself but you’re not sure where to start, we’ve pinned down some of the essentials below.
Is Los Angeles a good place to find fixer-uppers?
It’s essential to understand the basics of the LA housing market before moving any further. Fixer-uppers are generally a gateway to homeownership and represent a great way to get on the property ladder. LA’s fixer-uppers, in particular, provide a substantial potential ROI. SoCal’s flipping market has been hot for a while, and for those people who do have the appropriate resources, six-figure profits await. House flippers carry out more than a quarter of all California projects in LA county.
The City of Angels actually has one of the hottest neighborhoods in the country in terms of house flipping potential. The greater LA region is a hotbed thanks to both the housing volume and the wide price range. Profit margins for flipped properties in California grew from $90,000 in 2014 to $110,000 in 2017. Despite the fact that people know LA for its expensive living, experts consistently rank the city as the top market for real estate investment. So, let’s take a look at where to invest.
How to start looking for a fixer-upper in Los Angeles
StorageCafe has already covered the topic of how you can generally find fixer-uppers, but if you don’t feel like going back to the original article, here is a quick recap. We outlined four ways to find your desired property — listing services, auctions, real estate agents and websites, and driving around. The last idea might actually be the best one if you are already familiar with the city and know your way around LA’s neighborhoods.
If you’re somewhat new to the City of Angels or you want to browse potential properties from the comfort of your own home, there are plenty of options — a fixer-upper is always just a few clicks away. Start out with a bit of research on the city itself, as some areas are full of fixer-uppers. Make use of different listing services and real estate websites to gather information.
Where to find your fixer-upper in Los Angeles
In LA’s bustling housing economy, it can be hard to know how to choose the right area. Start off in the older neighborhoods and look for solid-built property. A few years ago, most house flippers would orient their search and rehab efforts to Mt. Washington and Silver Lake, where the average flipping gains exceeded $300,000. Even outside these neighborhoods, house flippers gained $138,500 (on average) over the original acquisition in the LA metro region five years ago. Median home prices have skyrocketed since then.
House flipping entrepreneurs have started looking into other areas. El Sereno, Cypress Park, Ladera Heights, Highland Park, Sherman Oaks and Valley Glen are good starting points, as there is a higher chance of finding a fixer-upper in these neighborhoods. These places are on the rise. They are not red hot (yet) but just ripe for buying into. You can also look into North Hollywood, Van Nuys, Mid-City or even Malibu if you’re up for a scenic ride and have a slightly higher acquisition budget.
Remodeling costs and return on investment
Making use of these techniques is sure to find you your diamond in the rough. But before getting your toolbox ready, here are a few things to consider. After purchasing the property, getting your house inspection and following the other necessary steps, carefully plan your expenses and realistically assess what you can and cannot do. Decide which home improvements are necessary or potentially unnecessary.
Plan your remodeling investments in detail. Average remodeling costs in California reach $263K. While there are no less than seven other states where these costs are significantly higher, California’s median home values occupy the third highest place, just after Hawaii and Washington D.C. In other words, while the value of your property may be among the highest in the country, your remodeling expenses will not, so you’ll most likely save some money at this stage.
Finally, keep in mind that while you need to bring added value to a home, you should focus on sensible and necessary changes. Take into account the value of the houses in your neighborhood, and don’t go too much over the area’s median sale price. Also, if you’re new to Los Angeles or to house flipping altogether, hiring a real estate agent may be a good choice.
Why you need self storage
Self storage can come in handy at various stages of your house flipping project. Be it tools, equipment, furniture, electronics or any other household items, using self storage can take a load off your mind. Los Angeles has over 200 storage facilities on offer. For about $290 a month on average, you can store away anything you need to so you can focus on a successful and financially rewarding house flip. StorageCafe will enable you to find the best storage options in Los Angeles for your specific storage needs.
