The housing market for first time home buyers varies from city to city. It also depends highly on your budget, obviously. When looking for our home in Los Angeles, our goal was to stay as close to the West side as possible seeing as that’s where we had lived for years, where our friends lived, where we worked and where we enjoyed spending the majority of our free time. With our budget, it was an incredibly tricky thing to do. This post however isn’t specifically about budget, although probably plays into it quite a bit. This is about a trend we noticed in the L.A. market during our long and exhausting house hunting journey.
At a certain point in time, you’ll start to notice things about houses that you’ve most likely never have before. The detective in you will start to pick up on little nuances from house to house and you’ll begin to map out patterns and trends in your mind. In Los Angeles, around the time of our quest for our first home, we mapped a few of these out, but one stood out the most.
Obviously flipping houses has been around forever and we’re all familiar with the popular real estate television shows that can quickly suck days out of our lives, but I think it’s good to see in writing, a definition of flipping. Here is one definition from Investopedia.
“Flipping: A type of real estate investment strategy in which an investor purchases properties with the goal of reselling them for a profit. Profit is generated either through the price appreciation that occurs as a result of a hot housing market and/or from renovations and capital improvements. Investors who employ these strategies face the risk of price depreciation in bad housing markets.
Investors can execute this investment strategy in several ways. For example, investors that prefer a short-term approach might buy several properties with mortgages and then hold them for only three or four months in the hope that their value will increase. Conversely, an investor can take a longer-term approach by buying a single, moderately priced property and renovating it to “flip” it for a profit.”
The profile that began to appear in the area we were looking in was that of the “Flip,” creating an endless sea of sameness. It’s like we were the detectives and the flippers were serial killers leaving their calling cards to taunt us. At some point in time, we began to notice the same tiles, fixtures, counter tops, etc.. and they were all a bit… bland (in our opinion.) To help understand what was going on, we fabricated our profile of this flipper.
Just like most general consumer products, with the exception of a few unique ones and limited high end options, most are designed to be easy to digest. By this I mean, there is very little to hate about them. Unfortunately, most often, this also means there is very little to truly love. It ends up being just good enough, and that’s how we felt about these houses. They were newly remodeled, had all the right features, good floor plans, nice landscaping and generally looked good, but there was nothing great about them. Again, I’m not saying that there is anything wrong with this at all. This might be exactly what you’re looking for. In fact, we placed offers on a couple of these houses, before removing them, and this is why we did.
Looking at these newly renovated houses that were seemingly flips, there was a certain uncertainty about the quality of the materials used, the overall craftsmanship and finally, the style / design. There comes a point in time when you have to consider how much work you are willing to do to get what you want. If you aren’t in love with the tiles and counter tops in a house, then you have to consider the option to renovate. If you’re buying a flip, consider that you will essentially be paying for the new materials you don’t like just to renovate later. If you purchase an older home that maybe costs a bit less, you potentially may have more to spend towards renovating exactly to your heart’s desire.
It’s all a balance game.
Just food for thought.