First Time Palos Verdes Flip - Any Advice?

[Brendan M Loftus]

Hi All,

Here's a brief summary of a flip deal I'm looking at (off market). A close friend has offered for me to buy their family home located in Rolling Hills Estates. The home is about 2,500 sq ft and sits on a +3/4 acre lot. The home hasn't been taken care of and needs a LOT of work including major systems replacement, roof replacement, landscaping, kitchens & baths, the works, etc.

In general, I am looking to connect with investors who know this market. Any color on the below items would also be helpful:

-This is a relatively large deal for me so I'm partnering with my friend. Any advice on structuring the partnership? We expect to take out a joint loan and fund the rehab with cash.

-We are also considering ways to incentivize our contractor. Does anyone have experience structuring deals that compensate contractors on the back end or know of other creative ways to incentive contractors?

-Does anyone have experience working with the Rolling Hills HOA? This is something I am looking into.

-Are there any other nuances around investing in Rolling Hills / Palos verdes? I am based in Manhattan Beach and don't know the market as well. Has Palos Verdes become a more attractive place to live during the pandemic?

Thanks in advance and I appreciate any help. Would be great to connect if you invest in PV.

Best,

Brendan

[RD Delgado]

Brendan,

 I'm happy you're taking the initiative to make the most of what sounds like an incredible opportunity.  RPV has always been a hidden gem, not just in the South Bay, but in all of LA.  

[Matthew Forrest]

@Brendan M Loftus Hey Brendan! Good to see a local flipper in the South Bay! I current flip in Torrance and Redondo Beach, but I am looking to add some properties in Manhattan Beach and PV.

Structuring the partnership: Depends on your experience and what you're brining to the table (connections, cash, qualifying for the loan, etc). Obviously everyones financial position is different, but I would consider financing the rehab as well especially if its your first flip. You can always use your cash for reserves.

Incentivizing Contractors: Everyones here to make money so structure your payment milestones so that they are incentivized to work. Don't be afraid to fire fast and early.

PV Nuances: I have no no experience with this, but you should start by calling the city and trying to get a lay of the land. What are permit review times like? How long will it take an inspector to come out? What are the construction rules for the city (time, days, etc)?

How great is PV: I'm definitely biased on this one, but I think PV is the greatest place on Earth. Sounds insane, but where else can you get those views, with that privacy, lot size and price point? Once upon a time MB was my end all be all, but now I'm all about PV. 

[Brendan M Loftus]

Thanks for the input - I agree, RPV is incredible!

Originally posted by @RD Delgado:

Brendan,

 I'm happy you're taking the initiative to make the most of what sounds like an incredible opportunity.  RPV has always been a hidden gem, not just in the South Bay, but in all of LA.  

[Jake Sullivan]

Hi Brendan,

PV really exploded during the pandemic because people were stuck at home and realized they wanted land, pools, and privacy. Great schools, low crime, and amazing views has always been a reason for people throughout LA to want to purchase on the peninsula, but the pandemic caused many people from the beach cities, Culver City, Santa Monica, and Marina Del Rey to make their way over for the land. Views, microclimates, schools, safety, and an equestrian lifestyle has really put PV on the map. 

Is your property in RH or RHE? 

RH (the gated city) has really strict guidelines within their city.

RHE is much more lenient, however, there are portions within the city that have CC&R's/HOA's that will dictate what you can do to the exterior of the property.

Tip: make sure your contractor and architect actually do business on the peninsula. Each city has a strict/unique set of guidelines, so it's better to save time and money by working with someone who knows what can/can't be done in each location on the peninsula, rather than spending time/money on a gameplan, only to find out months later that it won't get approved. One street may allow any type of home to be built, while the next block over needs to be a ranch style home or Mediterranean/Spanish style home.

Regardless, all of the city halls are very welcoming and are happy to walk you through all of their requirements, making it a great learning experience. 

[Account Closed]

I'm a bit late to the thread but would love to hear how your project is coming along @Brendan M Loftus. Any updates you'd be willing to share?

[Brendan M Loftus]

Hi Nicole! No updates to report! I've been respectful of the family's timeline while remaining persistent!

[Account Closed]

@Brendan M Loftus sometimes no news is good news :)