House flipping is back! I especially love it when I see a rundown 1920’s Spanish-style home get a facelift. It’s magical to see the transformation. In the right hands…a tired forgotten building can turn into the hottest house on the block. The key of course is to surround yourself with the right team. And finding the worst home in a cool desirable area doesn’t hurt. I thought the perfect person to interview for this piece would be Donovan Bowes. I met Donovan when he used to manage high end condo building years ago. Now, he works with investors on their flipping projects. He has certainly carved out a nice niche in this fast paced LA real estate environment. Check out the before and after shots…truly inspiring!
– How did you get involved in your business? My business partner and I both have resources that gave us the opportunity to work with real estate developers and flippers. It is definitely a niche that provides ongoing work from the same sources. It is very different in many ways from a traditional client job which we also do on occasion but working with investors makes up 90%+ of our work.
-Do you find that there are more investors getting back into the market in LA? Yes. There are numerous real estate investment firms that flip, wholesale, and buy and hold properties. Additionally there are financing other investors with hard money loans. We also have been contacted by many new investors this summer as well who are purchasing properties and looking for guidance.
– Is there a formula you follow when you go about flipping a home? For the construction side there really isn’t a formula. We have to see the scope of work and determine if we are purchasing finish materials (faucets, lighting, etc.) in our estimate or if the client is purchasing those, and what the job will cost. We then relay that to our client and make sure the time frame of the job works with them. For the investors side, many of the investors want to see a 10-20% ROI (return on Investment). Buying the house at the right price and making sure realtor commissions, holding costs, and insurance is huge. Additionally being realistic in what the neighborhood can support in a sale and how much it will actually cost to renovate it is equally important. You don’t want to put $200 bathroom faucets in a house that really only needs $70 faucets.
Have you found that the design trend has changed over the years? Various shades of Grey and White are being used by everyone. Our homeowner clients tend to use many various colors combinations more so than investors, but it’s wise that investors minimize personalizing too much so the sale appeals to a larger group. As for design choices in general, it really depends on the style of the home. Clients try to stick with the style of the home but modernize it. If it’s a Spanish maybe choose white walls and wide plank hardwood flooring (which is popular) and pair that with a contemporary set of cabinets, counters, plumbing finishes then often bring back the Spanish feel with lighting (such as a wrought iron chandelier). Carrera is a popular choice for counters and tile now in a Traditional home as well as it’s used In Modern homes when you want to warm it up a bit. With that said Quartz seems to apply to Traditional and all other styles. Quartz is by far our biggest installed counter material in both bathrooms and kitchens. For tile materials the larger the better. We use a lot of subway tiles ranging 4″x8″-4″x16″, flooring and shower walls often ranging from 12″x24″, while floor tiles can go up to 18×18″. This gives a more solid surface look. Hardwood flooring still ranges all over the place from dark to light but wider pieces are more popular when replacing an entire home. Additionally there are several great looking engineered pre-finished choices and for the more budget conscious also even nicer laminates available now.
– Do you have advice for someone wanting to get into flipping? Make sure you are very knowledgeable about the cost of construction because the traditional 20% General Contractor oversight is much less than a traditional remodel and things always come up that can cost you. Because of the volume of work with each investor you are expected to charge much less and the same generally applies to real estate agents who work ongoing with flippers.
-What would you say is the key to your success? Relationships with our investors. Without them we aren’t busy.
I must admit I personally have the itch to get into flipping myself. Once I interviewed Donovan I was on the MLS in seconds searching out listings in areas that I really like. I think I caught the bug! Sometimes it just takes a thought to get the ball rolling. If you need assistance locating a place, just let me know where you envision yourself and we can get started. It takes a bit of stamina to flip, but it could be very rewarding. Now…back to the MLS I go. Here’s to the hunt!
Donovan Bowes at DesignBuildRJC
(image credits: themls.com, Donovan Bowes)