highland park's revival is prime for Investors
By Connor McGlynn
While some Highland Park residents are being forced out of their homes and neighborhood with increasing gentrification taking its toll, people like Michelle St. Clair and Andreas Larsson are making a living from buying housing renovations.
House flipping, a phrase used to define a home sold more than once in the same year, has become a norm for investors and real estate agents within the community as a way to capitalize on the surging draw that the upper eastside neighborhood is experiencing.
“You have the demand, a demographic trend of people repatriating back to the city to buy their first home,” said St. Clair, a real estate agent for Sotheby’s International Reality. “A generation ago the idea was to get away from the city and move to the suburbs.”
While some Highland Park residents are being forced out of their homes and neighborhood with increasing gentrification taking its toll, people like Michelle St. Clair and Andreas Larsson are making a living from buying housing renovations.
House flipping, a phrase used to define a home sold more than once in the same year, has become a norm for investors and real estate agents within the community as a way to capitalize on the surging draw that the upper eastside neighborhood is experiencing.
“You have the demand, a demographic trend of people repatriating back to the city to buy their first home,” said St. Clair, a real estate agent for Sotheby’s International Reality. “A generation ago the idea was to get away from the city and move to the suburbs.”
Houses continue to hit the market in the ever-gentrifying Highland Park community (Connor McGlynn)
St. Clair began her real estate career in 2008 after transitioning from a long stint in the music industry and says that about 45 to 50 percent of her yearly business is working with listings of these quickly renovated and resold houses.
In 2013, Highland Park ranked 12th in the nation in markets with the highest return on flipped houses with the average gain from flip being $191,400, according to listing site Redfin.
This increase in total value only references the difference in final sales prices and does not account for the amount of money put into the renovation process, an amount that St. Clair explains varies greatly.
“There is no formula. Each developer and each person is going to be different. There are some people that see themselves as only handyman and they do very tacky or basic jobs,” St. Clair said. “Any house of substantial size, even if its not 2,000 square feet, I haven’t seen a project recently done for under $200,000.”
One house that the California State University, Long Beach graduate worked on recently was an estate at 5655 Range View Avenue, a house that was bought on May 3, 2014 for $565,000 and resold for $1,080,000 on January 30, 2015, according to public records.
“It’s always very nerve wrecking during the process,” said St. Clair about the renovations that took place over the eight month period. “The cost could end up being $400,000 cash, up-front and in the mean time you haven’t made any money and you’re out not just the purchase price, but also the price of materials and labor.”
In 2013, Highland Park ranked 12th in the nation in markets with the highest return on flipped houses with the average gain from flip being $191,400, according to listing site Redfin.
This increase in total value only references the difference in final sales prices and does not account for the amount of money put into the renovation process, an amount that St. Clair explains varies greatly.
“There is no formula. Each developer and each person is going to be different. There are some people that see themselves as only handyman and they do very tacky or basic jobs,” St. Clair said. “Any house of substantial size, even if its not 2,000 square feet, I haven’t seen a project recently done for under $200,000.”
One house that the California State University, Long Beach graduate worked on recently was an estate at 5655 Range View Avenue, a house that was bought on May 3, 2014 for $565,000 and resold for $1,080,000 on January 30, 2015, according to public records.
“It’s always very nerve wrecking during the process,” said St. Clair about the renovations that took place over the eight month period. “The cost could end up being $400,000 cash, up-front and in the mean time you haven’t made any money and you’re out not just the purchase price, but also the price of materials and labor.”
After the two-story Range View house was bought for the first time, new owner Andreas Larsson tore it apart, added new plumbing and electrical circuiting, put down hardwood floors and altered the exterior design by adding glass garage doors to the hillside complex.
“You have to be able to visualize something for you to put your stamp on there and for you to feel like you can work with it,” said Larsson about trying to find the right house to begin a project with. “You also have to buy something in an area with an interest of people wanting to live there. Highland Park and Eagle Rock have been those areas.”
Larsson, an immigrant from Sweden, and his father-in-law have been flipping houses in the area for about three years and have done six projects on their own, in addition to designs for other investors.
The former commercial photographer explained that Highland Park is becoming such a hotbed for flippers that he was forced to move outside the neighborhood for his current project because he couldn’t find the right house, but he is optimistic about what this trend will do for the community.
“It’s exciting for the people that have lived there for awhile to see this because I think it’s going to benefit everyone that lives there,” Larsson said.
With Highland Park residents already struggling to adapt to the rising house prices, Trulia real estate notes that in the past calendar year, the average sale prices have increased by $155,000, the surge in house flipping adds to the trouble.
“You have to be able to visualize something for you to put your stamp on there and for you to feel like you can work with it,” said Larsson about trying to find the right house to begin a project with. “You also have to buy something in an area with an interest of people wanting to live there. Highland Park and Eagle Rock have been those areas.”
Larsson, an immigrant from Sweden, and his father-in-law have been flipping houses in the area for about three years and have done six projects on their own, in addition to designs for other investors.
The former commercial photographer explained that Highland Park is becoming such a hotbed for flippers that he was forced to move outside the neighborhood for his current project because he couldn’t find the right house, but he is optimistic about what this trend will do for the community.
“It’s exciting for the people that have lived there for awhile to see this because I think it’s going to benefit everyone that lives there,” Larsson said.
With Highland Park residents already struggling to adapt to the rising house prices, Trulia real estate notes that in the past calendar year, the average sale prices have increased by $155,000, the surge in house flipping adds to the trouble.
The rapid influx of investors seeking Highland Park as a house flipping destination is making the competition too difficult for Larsson (Connor McGlynn)
Evan McCune, 26, works at The Juice on York Avenue and lived in Highland Park for a year before he was forced to move to Filipinotown after he couldn’t find a rent within his price range.
McCune says that he currently pays $600 a month for his new apartment while after he had to leave his place in Highland Park when his friend decided to sell her house, he couldn’t find a rent for under $800 in the neighborhood.
“There is this whole mindset of wanting to be a part of what happens next, but I think for a lot of people it’s the fact that they have money, they want culture and they want to be a part of cultural diversity,” McCune said. “A lot of people that live here need to find new houses like my friends because they just can’t afford it here.”
Larsson describes having different encounters with community members that hold a positive outlook toward the work he and other flippers do.
“Everyone that I’ve worked with in Highland Park is always a little bit afraid of change, which I can relate to. When the neighboring house is being sold and you don’t know what its going to turn into is always tough at the beginning, but I would say that 99 percent of the time people turn out to be extremely happy about it.”
While the allure of house flipping extends beyond just the limits of Highland Park, RealtyTrac said Los Angeles County as a whole had the third most flips in the entire country between April 2013 and March 2014 with 3,610, it is obvious that the community at the forefront of the gentrification conversation is capitalizing more than most.
In March 2012, The Eastsider surveyed 21 flipped houses and saw an average sale price increase of 73 percent, rising from an initial buy of $249,405 to $432,213 on the second listing.
Larsson said that the goal for each of his projects is to hit a return of at least 20 percent and once he is completed, he has been able to make sales in as quick as a week.
“A house is only worth what someone is willing to pay for it,” he said. “I try to price it for what is fair so that way you don’t have to price drop and it’s not just sitting around.”
With the roof continuing to be raised on the prices, St. Clair expects the trend to continue over the next 10 to 15 years, citing the city planners’ intentions of improving public transit as well as a rise in younger crowds continuing to want to live in the action of a city rather than outlying suburbs as the main reasons.
“They’re establishing their adult lives and not saying that, ‘now I have money so I want to move out and settle down,’” St. Clair said. “They do want to settle down, but they want it to be in the city.”
If progress continues to be made throughout these services, it appears that although homeowners won’t be, house flipping in Highland Park is here to stay.
The images presented in this article are copyrighted and belong to their respective owners. Its use on this website falls under the fair use of US Copyright laws. No infringement is intended.
McCune says that he currently pays $600 a month for his new apartment while after he had to leave his place in Highland Park when his friend decided to sell her house, he couldn’t find a rent for under $800 in the neighborhood.
“There is this whole mindset of wanting to be a part of what happens next, but I think for a lot of people it’s the fact that they have money, they want culture and they want to be a part of cultural diversity,” McCune said. “A lot of people that live here need to find new houses like my friends because they just can’t afford it here.”
Larsson describes having different encounters with community members that hold a positive outlook toward the work he and other flippers do.
“Everyone that I’ve worked with in Highland Park is always a little bit afraid of change, which I can relate to. When the neighboring house is being sold and you don’t know what its going to turn into is always tough at the beginning, but I would say that 99 percent of the time people turn out to be extremely happy about it.”
While the allure of house flipping extends beyond just the limits of Highland Park, RealtyTrac said Los Angeles County as a whole had the third most flips in the entire country between April 2013 and March 2014 with 3,610, it is obvious that the community at the forefront of the gentrification conversation is capitalizing more than most.
In March 2012, The Eastsider surveyed 21 flipped houses and saw an average sale price increase of 73 percent, rising from an initial buy of $249,405 to $432,213 on the second listing.
Larsson said that the goal for each of his projects is to hit a return of at least 20 percent and once he is completed, he has been able to make sales in as quick as a week.
“A house is only worth what someone is willing to pay for it,” he said. “I try to price it for what is fair so that way you don’t have to price drop and it’s not just sitting around.”
With the roof continuing to be raised on the prices, St. Clair expects the trend to continue over the next 10 to 15 years, citing the city planners’ intentions of improving public transit as well as a rise in younger crowds continuing to want to live in the action of a city rather than outlying suburbs as the main reasons.
“They’re establishing their adult lives and not saying that, ‘now I have money so I want to move out and settle down,’” St. Clair said. “They do want to settle down, but they want it to be in the city.”
If progress continues to be made throughout these services, it appears that although homeowners won’t be, house flipping in Highland Park is here to stay.
The images presented in this article are copyrighted and belong to their respective owners. Its use on this website falls under the fair use of US Copyright laws. No infringement is intended.