New Flip Blog: We're Adding 1,055 SQFT: LA (Jefferson Park) Home

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Hello BP Community! As many of you know, I created a blog for one of our recent flips in South Los Angeles with weekly updates. That flip was very successful as we completed the rehab in 11 weeks, had multiple offers and from purchase to close was only 4 Months. As some of you know, we are very creative and artistic when it comes to our flips and we perform upgrades that are not advised on the BP Podcast and many forums (we put colors on and inside our homes and fixtures that are very design-oriented....and not everyone will love it, but the few buyers we do attract REALLY love it) so it should be pretty interesting what we do on this flip.

My partner Zerik and I are now starting a new flip that I feel would be very interesting for BPers to follow, as this one is not your standard rehab. Why?

1. It's a little tiny ugly house: 672 Sqft

2. We are adding 1,055 Sqft

3. We are demolishing an entire garage and storage shed

4. We are getting multiple permits with the city of LA, which can be a huge headache

5. The home is in Jefferson Park and is in an area that is HPOZ (Historic Preserved Overlay Zone) which means there are only certain cosmetic changes we can make to the front of the house.

6. Marrying the old structure to the new one may be a bit tricky

With that said, with all of the moving parts and extended timeline, I will be posting Monthly updates instead of weekly. As before, please feel free to send any questions you may have. 

Here's the deal:

ACQUISITION PRICE: $469K

REHAB BUDGET: $227K

ARV: $935K

TIMELINE: 32 Weeks to finish (8 Months) - We are being very conservative due to LA's reputation with permits...however, we hope to finish in 6 months. 

FUNDING: We are using a Hard Money Lender in addition to private funds for our portion of the acquisition, a portion of the rehab and holding costs. 

The home BEFORE images are below. 

I will have my next update in 30 days to show what we've accomplished and updates on the rehab, timeline and budgets. 

Thanks!

Shawn

Looking forward to seeing this unfold! What’s your website?

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@Shawn Ward , pretty amazing how much prices have gone up in the area. I've heard there are permit expediting services  in L.A , but don't know much about them. Are you using one of those? Not sure the cost but maybe it could be worth it they can actually help you get things done quicker. Best of luck!

@Joseph M. we are using any services, but if you somehow remember a service, let me know? Thanks!

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I'll be following this one as well. Seems like a good one. I wonder how our LA office miss this one. 

The photos look like a big lot!  Awesome idea I wish you success.  I love south la but that avr will be record for the area I assume 

Looking forward to reading this

Hey @Will Barnard ! Good to hear from you man. 

1. Single story only. Adding to what was the backyard..

2. Lot is 5,888 sqft

3. The home was bastardized, so it is actually zoned as a 'non-contributing home' in the HPOZ zone. We feel as if they will not be as hard on us here, but we'll see...expecting the worst of course. 

Onwards,

sjw

@Alex J. yes..the lot looks much bigger than the 5,888 that is listed...we may have to measure it to see if it is accurate. 

Actually, we will not be setting a new record. Our home run comp is actually a 3/2 craftsman home that is only 1550 sqft (we'll be almost 200 sqft bigger) and has a smaller lot than ours. Sold for $1.05mill! Crazy. We are not expecting that...but would love to hit it of course. Check it out:

https://www.redfin.com/CA/Los-Angeles/2321-W-31st-...

This one went for $917k: https://www.redfin.com/CA/Los-Angeles/2158-W-29th-...

We figure we'll end up somewhere between these 2. 

Take care!

sjw

Originally posted by @Shawn Ward :

@Alex J. yes..the lot looks much bigger than the 5,888 that is listed...we may have to measure it to see if it is accurate. 

Actually, we will not be setting a new record. Our home run comp is actually a 3/2 craftsman home that is only 1550 sqft (we'll be almost 200 sqft bigger) and has a smaller lot than ours. Sold for $1.05mill! Crazy. We are not expecting that...but would love to hit it of course. Check it out:

https://www.redfin.com/CA/Los-Angeles/2321-W-31st-...

This one went for $917k: https://www.redfin.com/CA/Los-Angeles/2158-W-29th-...

We figure we'll end up somewhere between these 2. 

Take care!

sjw

Excellent find best of luck.  I've dealt with my fare share of non conforming and it can get tricky make sure you have an experienced architect that knows setbacks etc...you will crush it

Yep @Alex J. , my partner is an architect, so hope it will not get too loosey goosey. :-)

Looking forward to seeing what you do with the place!

Hey @Shawn Ward I’d love to team up and possibly provide you appliances for your flipping ventures. I own an appliance company in Downey and we sell new and scratch & dent appliances with huge discounts. Pm me if interested

(562) 861-3819

Hey guys!

So, we are into our 2nd of a planned 8 months of rehab. We are of course hoping to finish earlier and our new sub that we are using feels he can definitely make it happen. The hold up will be with the permits and dealing with the HPOZ in the neighborhood. Here are some updates to share for the first 4 weeks:

REHAB (images below):

  • Our demo crew did an incredible job removing the old garage and shed in the backyard
  • All internal demo has been completed
  • Our draftsman worked with my partner Zerik (who's an architect) to come up with our addition plans and it has been submitted to the city. We've had a hiccup that we are working with the city on now. Totally not our fault! Crazy, but one of their inspectors forgot to tell us that there is a crazy rule in the HPOZ that there is a 10' offset from each property line on each side of us for any additions. The lot is not large enough to build our planned addition with having that much space taken away from us. Their supervisor apologized. So now, we are working with a Plan A (to get a Variation approved) and Plan B (to get a compromise of 8' each side, which would require 10 neighbors approving of it. We are hoping Plan A works so we do not have to get signatures. Fingers crossed. 
  • All new framing on the original structure is complete
  • The new stairs into the basement is done. The original stairs led from the backyard. We'll now have an internal staircase, which will allow for a nice room. It will not be permitted, but it should add about 400 sqft to the overall home, which will still be permitted at 1700 sqft.
  • We are working with a new Sub we haven't worked with before. He comes highly recommended and his pricing was too good to turn down. He and his crew also work very fast!

TIMELINE:

  • We are in Week 4 of 32 in Rehab & on time
  • Our Sub feels he can get actual work time done in about 3 months (without permit holdups)

BUDGET:

  • Our new sub contractor's contract has allowed us to save money on our original projections, so we may be able to get everything done withing $200k. We'll see. 

SELL:

  • Plan is the same to take the home to market with the agent we used for La Salle & Mercury, Nicole in April or May of 2018.

Thanks so much for reading, and I'm looking forward to the next update in a few weeks. As usual, please feel free to ask any questions you may have, as my goal here is to help people see the entire process, step by step in real time. 

Onwards!

Shawn

Haha! Yes it is @Kuba F. ! We'd really like to permit it...but the cost of the engineering that the city would need to have done due to a home like this, it would take too much time and money for what it will return for us in ARV. We'll get a lot of value with the basement without having to permit it.

All the best!

sjw

Hello BP! 

So, I've waited a bit to update since there hasn't been much action...and 100% due to the HPOZ and city requirements for us to make changes to the property. What once was thought to have to do only with the front of the house, has actually hit us with the back of the house. 

Come to find out, there was some sort of restrictions were implemented years ago after other homeowners began to add to their properties in the back, and pushing their homes closer to the neighbors by expanding their square feet. This lead to some ridiculous restrictions of 10' offsets, which most of the homes are originally only 5'. 

Long story short, we had to get signatures from 6 neighbors, which you can imagine took time with people's schedules, etc. But, after 3 weeks, we finally got all of them and can now submit for our next round of permits. 

We have dug up the trenches for the foundation and laid the steal frames, and now waiting on inspection to happen in order for us to begin laying concrete. 

But, since this all had to happen, that is all that has been done in the past month. We still have a lot of time, but HPOZ may be something to bring me to a pause next time I am investing. 

REHAB (images below):

  • Trenches done
  • Steel framing set

TIMELINE:

  • We are in Week 11 of 32 in Rehab & on time
  • Still surprisingly on time, as we built in extra months for permit issues

BUDGET:

  • We are on budget still and have only spent $40k of the planned $194k of rehab

SELL:

  • Plan is the same to take the home to market with the agent we used for La Salle & Mercury, Nicole in April or May of 2018.

'Til next month...lets hope we are MUCH further along. 

Thanks!

sjw

Tough house to rehab since the footprint is so small.  Almost better suited as a rental house.  Huge demand for those...

@Shawn Ward , sounds like the city is making you jump through hoops.. not surprising for city of L.A . Such a huge bureaucracy. 

Best of luck with the next steps in the rehab.

Smart of you to have a realistic timeline and to have anticipated delays.

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