Wanted: Sweat Equity of $750kPosted on Monday, April 2nd, 2007 at 11:25pm.
1800 Laurel is a Tudor-style mini-castle, on a quiet tree-lined street west of Pacific and near the American Martyrs church and school. It is large and nicely updated – 4br/4ba and 3000 sq. ft., nice materials and finishes inside, a clean coat of smooth white stucco outside.
Before the current sellers bought it in December 2004, this house had been punished by time and poor upkeep. A home built in 1982 looked like a poorly done 60s-era shack. You had to have vision to have any interest in the place back then.
The current owners did have vision. They paid $1.6m and poured time and money into a complete modernization effort. They could easily be into this house for $2m or more by now.
Just about exactly 2 years after they moved in, the sellers are getting out.
They're asking $2.499m to start. That means they believe it is reasonable to say: "With the work we put in, and the continued rise in the real estate market, this house is worth $900,000 more after only two years."
If they get this price, and pay the full standard 6% in commissions (unlikely), these sellers will gain $750,000, minus, of course, their remodeling costs. If we assume expenses at or near $300k, what these sellers are shooting for is the full $500k tax-free profit possible after living in the residence two years.
But the price is fishy, and the goal may be elusive. Today there are 17 homes in the Tree Section priced over $2m, and only two – including this one – are remodels. The rest are new or only a few years old.
For $1.990m, you can get a house just a few blocks away, same size, newer construction, at 758 14th. (Recently featured by MBC and purchased last year for $1.7m.) Comparably sized homes at 2812 Elm and 1413 Oak can be had for about $1.7m, more than enough of a discount to offset the location differences.
These are savvy flippers, though. They picked their project well and they've attempted to time their sale for maximum advantage. They have room to drop the price if they don't get lucky within a couple of weeks. MBC will watch and report back.
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