South Bay Area

[Jorge Ruiz]

Hello BP! I'm meeting up with an investor this evening. Since both he and I are in the South Bay Area in Southern California (Hawthorne, Manhattan Beach, El Segundo, Gardena, Carson, etc.) I wanted to know if any of you out there have any experience with this area. I plan to wholesale to this investor and he will rehab and flip them. What advice can you give me from a wholesaler perspective and a flippers perspective so I may better understand what I am about to embark on? Thanks BP.

[David Varvaro]

Hi Jorge,

My wife and I are real estate agents in the South Bay. We flip ourselves as well as help other investors find properties all throughout the South Bay including all the areas you mentioned.

The best advice I can give you is to really get to know the neighborhoods you are farming so you know the true ARV comps. A lot of neighborhoods in the South Bay are in pockets where you literally cross one street and the homes are worth 25% less in value. If you are just using comps based off a 1/4 mile radius this can really get you in trouble.

The other thing I would recommend is making sure you account for all costs to your buyer not just rehab costs. Closing costs both when buying and reselling as well as taxes paid on profit should all be included. Your best bet would probably be to ask him specifically what type of margins he's looking for.

Hope that helps. Good luck!