All Forum Posts by: Alex Baev

You're right, i shouldn't assume nobody wants it. I've been walking my dog past it every morning for over a year, and just today saw a new bandit sign on the chain-link fence that surrounds it.
I'm emailing you the property address

You can have something built to code but not permitted, while something that's permitted is automatically built to code.

In my area, the city requires a permit for any work on a house that exceeds $500 - i.e. it's mainly there to make money for the broke municipality - including paint, tile, flooring, any concrete work, door and window replacement, you name it. If these were "hard laws", most home improvement stores wouldn't exist. Most rehabbers that i know don't pull permits for anything other then serious structural work that changes square footage (room additions, expansions) and other new beneficial additions that need to be reflected on the title or public records (new HVAC with ductwork, changes of gas water heater to electric, etc).

Hire a good good licensed contractor to give you an unofficial honest opinion for a nominal fee, make notes of everything he says, then hire an official inspector, see what he finds and also point out the things contractor mentioned to discus further. That should prepare you for negotiating with the seller.

RE is a value-added business, so buying something low and improving "some aspect" of it is the only way to sell it higher, while pocketing the difference. Now, whether the acceptable difference is $1K or $100K is only a question of how much your time is worth... but at the beginning there's also the cost of educating yourself

To the guys (and lady) in this thread, since you seem to have experience in this area, i'm curious if any of you have dealt with former half-way houses (private residences used as drug and addiction rehabs) and code-specific issues that were attached? There's a place in my neighborhood which is a a beautiful Spanish-style two story 4 bedroom, but with all the flipping activity in the area, no investor seems to want to touch it with a ten foot pole. All the neighbors know it as a former half-way house, and i recently ran into a maintenance crew that was hired by the bank (BofA) to trim the yard once in a while. The house is in some stage of foreclosure process, and i know there's at least one lien for $10K on it for the chain-link fence that was put up around it by the city, and I know that the previous owner has taken some equity out of it before he split to Mexico.

From some research, it was one of about 7-10 houses this one "therapist" purchased in LA and Long Beach area over the years - i found at least 5 that have gone into and have already sold through foreclosure auctions - and the houses were used for both drug and mental illness rehab, as well as advertised themselves as AIDS friendly

Are there some red-flags in pursuing such a property?

Great story, easily relatable. That check trick is phenomenal - my dad did the same thing years ago.
Thanks for taking the time for writing your story - teaching others is one of the best ways to streamline and organize your own thoughts

Flips more often then not seem to cover up termite damage, rather then address it. If you plan to own the house for some time as a rental, ask your inspector to pay attention to any signs of termite damage or presence, and if there are many, i would request the house to be tented at seller's expense.

Definitely check which permits were pulled for and compare to work performed. For example, if a new central air system was installed into a house that had no central air before and the work is not permitted - the AC may work fine, but the title of the house won't reflect that the house has this great new feature.

First post, but instead of asking a question I'm going to offer my two cents on this, since it's right next door

I agree that "chasing performance" by buying for appreciation doesn't seem smart. Haven't we learned anything in 2008?

All the activity that I hear of in Silver Lake - or LA as a whole for that matter - are flips. Buying or rehabbing to rent just doesn't make sense in LA metropolitan area at current prices.

You'll spend close to $30K on mortgage and taxes yearly, while only collecting about $33K in rent, leaving you with very little for maintenance and repairs. All the while your downpayment is tied up in it. That is if you can get $3K rent a month - which seems like a lot of money for such spartan house, but i haven't been renting for two years now.

The house is on a hill, so you are likely to have foundation problems, either now or in your projected future. Looking for houses built flat eliminates that problem to a degree, although we're still in an earthquake country and always shifting.

Also, may be worth exploring why Redfin lists it as 3bed 2 bath, but public records down the page say 4/3. Was there a guest house that was demolished? Was the property split or rezoned? May be worth looking into. You can personally go to permit office downtown and for about $15 get all recent permits pulled for this address - worth doing before any buy.

I'm a complete newbie to this, but I personally think the Silver Lake, Los Feliz and even Atwater ship has sailed to jump in on any sort of action.
If you're set on renting, look in neighborhoods surrounding Silver Lake and Los Feliz to the North and North East - that's the direction LA is gentrifying - Glassel Park, Highland Park, Elysian Valley etc. You may end up buying a former gang house (that's what happened to us), but if you tough it out, it's better value long term. I personally like reading North East LA police quarterly reports to see which areas are improving. It makes sense to educate yourself to see which gangs operate in which area and which are on a decline. One good thing about all this activity is that very soon they will all be priced out of the entire area - i can already see that happening. And it's only a matter of time before the spill-over from Silver Lake and Los Feliz will cross the great I-5 divide and go East.