All Forum Posts by: Heath Clendenning

Chris, I'm also in SoCal and if you want to connect it might be useful. 

My father is a contractor on the east coast. He has said with flips, don't think about sq. foot. Only use this in new construction. Additionally, some affluent towns might have extra fee's for waste removal, parking, etc that local contractors and this city hall will know about. 

75% in a nice neighborhood is a good ARV according to what I'm reading for more luxury homes. I think if you have that threshold, work with a good inspector and don't over estimate your sales price - then you should be in solid shape.

The fact that your project already has the size and just needs rehab is excellent. Less chance for rot, termites and irrigation issues. 

Would love to know how it is going/went on your project. 

Personally, I have foreign investors on my projects and I'm quite conservative with projections, but always looking for local intel to make my numbers more accurate. 

PS: Have any decent recco's on CPA's? 

Thank you both for your insight. 

I have enjoyed reading hundreds of posts here and on other forums over the past couple of months. There is a lot of experience and I am pleased to see, a lot of transparency. 

I live in Los Angeles and have private investors who will join me in an equity split of properties we plan on rehabbing. 

While I have an above average understanding of construction costs (as I have worked in this industry before) I am curious to the threshold percentage - A.K.A the "70%" rule - for luxury real estate. 

Real life scenario: 

There are multiple 2 br single-story homes in a particular area of LA going to $1.5-$1.8 million. On the same or nearby streets, are $3.2-$4.1 million dollar homes, many newer construction. 

I'm very interested in a project here and would even consider expanding any potential investment 'out and up' to gain sq. foot space, views and of course value. 

Should I hold fast this rule of 70% at properties of this range? I have read elsewhere that some people are comfortable in the 80% range. 

If anyone can provide examples or past history, I would be incredibly grateful. 

Kind regards, 

Heath

I wish this post would get some attention. I'd love to hear about this as well. 

Why does everyone seem like this is too-good-to be true? 

Rene, what was the outcome of the house? Did it sell? What price?