Tree Section Flipper Re-Do Scores $2.4M+

By Dave Fratello | May 26th, 2015

One of the symptoms (for better or worse) of a real estate upcycle is that flippers come to town and find it profitable to make over homes for resale.

It may be just an impression, but this time around, it seems like the caliber of work is a cut above the kinds of quickie rehabs we saw in the early part of this century, as the last cycle was heating up (2002-2005 especially).

Hypothesis: There are now fewer "get rich quick" cable TV shows about home flipping.

Corollary/Related: There are now fewer people watching cable.

Whatever the full set of reasons, the Manhattan Beach real estate market seems to have attracted better work.

3613 Walnut Avenue Manhattan Beach CAOne that stood out for us was the Tree Section remodel at 3613 Walnut (4br/5ba, 3545 sq. ft.), where a sale has now closed at $2.429M.

We gave this one credit simply because they did such a good job of taking a "forlorn, dreary 80s house" (as MBC said recently) and giving it a very nice, updated, Cape Cod type style. 

The house really needed everything, top-to-bottom, and got about 95% of what it needed. (Some of the windows that should have been replaced were not.) They even added A/C. (We featured the transformation in "Before and After at 3613 Walnut." See the photos there.)

Being so proud of their work, the flippers chose to shoot the moon on price, but they must have known their start $2.699M was way out of line.

That cost the flippers time on market. The listing officially tallied 157 DOM.

Once a series of price chops had brought the ask down to $2.449M, we said here it was "beginning to look like a deal (it's all relative), even with the home's close proximity to Rosecrans and the refinery."

Multiple offers followed, and the closed price was right near that last ask at $2.429M. (Disclosure: Dave prepared an offer for a client.)

That's a healthy markup of $802K over the April 2014 acquisition price of $1.625M.

Deduct the costs of the rehab & carry, plus costs of sale, from the $800K to find the profit... whatever it was, exactly, we're guessing that "considerable" captures the flavor of it.


Bonus Background Reading: MB Confidential took note of the sudden return of flippers as the market recovered in a November 2012 post, "The 'F' Word: Flippers." We opined then, "perhaps the return of the flipper is nigh."

An update in August 2013, "Flips Are Really Back," verified the trend.

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