Flippers Making It Work

By Dave Fratello | February 25th, 2020

Every once and so often, an older Manhattan Beach property winds up in that narrow lane between being a pure scraper and being the sort of place that an owner/user would want to remodel.

Too much work for a typical buyer, too much house to knock down.

The opportunists who find and fix those places are the flippers of the world.

A couple have very recently succeeded.

1437 23rd Street Manhattan Beach CA1437 23rd (3br/4ba, 2300 sqft.) was acquired in April 2018 for $1.599M.

The revived, modernized version came to market in September 2019, asking a big $2.850M.

It took some time to work through the system, making 4 price cuts over 4 months, including one near year-end 2019.

They've closed it up now, though, at $2.500M.

That's basically a $900K spread between acquisition and sale, and there's big profit there if the renovations were done for near $400K or so, all things considered.

2704 Oak Avenue Manhattan Beach CAAlso, 2704 Oak (3br/3ba, 2175 sqft.) looks like a success from here.

The original was dated and quite degraded when it sold in Sept. 2017 for $1.500M.

And the location is a challenge, the commercial side of Oak with very little buffer from noise from Sepulveda in the backyard.

But the flippers gave it a go, removing walls and opening up the place, adding modern style and delivering a midsized home with a newer feel and some flair. They even revived the pool and deck.

The end result was not the $2.499M they first sought, but $2.230M in a sale that closed last week.

Of course, that's still a decent spread after costs of sale and renovations are considered. And greater than $1,000/PSF, no less!

Not looking quite as promising: 1776 Voorhees (3br/2ba, 1625 sqft.), acquired for $1.231M in March 2019, and currently asking $1.499M with over 7 months on market. (It got as low as $1.468M late in 2019 before re-listing.)

1148 N Poinsettia Avenue Manhattan Beach CAAnd it's still to be seen what they can pull off at 1148 Poinsettia (3br/3ba, 1975 sqft.), acquired for $1.625M in May last year and new to market at $1.998M now in its improved condition.

It's striking that the margin between acquisition and list price is so modest, just $373K, and you might see $100K in costs of sale, reducing the potential profit to ~$275K minus costs of renovation.

Whatever they paid for the work, that's going to be a much narrower fit, and profit, than the two recent flipper closings noted above.

UPDATE: Our original post failed to take note of 707 S. Redondo (4br/4ba, 2465 sqft.), also a flipper remodel. Acquired for $1.292M in April 2019, the updated version debuted at $2.175M and has found a buyer quickly.

 

It's generally a sign of health for the market when profit-seeking remodelers see opportunity. And we get newer homes without going all the way down to dirt, keeping a bit more of the neighborhood's scale.

You can certainly appreciate the service flippers provide in updating the look of some homes.

Below, the "before" photos from each of the 3 flips pictured above.

 

 

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