Flipping houses is riveting reality television for some. For others, it’s a living.
Thomas Bayles joined the real-estate business at the tail end of the financial crisis to become a full-time flipper. He buys the ugliest houses in desirable neighbourhoods in and around Los Angeles, pours money into renovations, and sells the properties for a handsome profit within a few months. Bayles has flipped over 16 abandoned homes and hoarder-havens in his career.
Bayles shared some before-and-after photos with us to show that even the grittiest dwellings have unlimited potential – with a little TLC and a lot of cash.
A home that’s been long neglected by hoarders, absent landlords, or the elderly would send most potential buyers running. Bayles, a 31-year-old professional flipper, sees opportunity.
These homes typically list for less than what a comparable property with more curb appeal would. “I’m always looking for the ugliest house in the entire neighbourhood,” Bayles said.
A better deal means a bigger profit for Bayles. He reinvests earnings into buying new properties, which are all managed under his company Urban Asset Group.
Bayles, a former mortgage broker, saved for three years to buy his first property in 2011. It was a two-story home in Echo Park, an Eastside neighbourhood of Los Angeles.
“It took me quite a bit to save up, and even when I decided to pull the trigger, I didn’t have all the money I really needed,” Bayles said. He called it “the best decision” he’s made.
“It was a trial by fire,” Bayles said. The property had some historical landmark protections, and Bayles had to seek permission from the city before changing the paint colour.
He bought the Echo Park home for about $US520,000, spent roughly $US150,000 on renovations, and sold it a year later for $US805,000 — putting $US135,000 into his pocket.
“After the first one, I was like, ‘Wait, I can totally scale this up,'” Bayles said. In 2013, he brought on his brother and a second business partner to help finance the flips.
In the beginning, Bayles spent a majority of his time driving around Los Angeles touring homes for sale and checking out dilapidated properties that had yet to hit the market.
He sent letters to homeowners he never met trying to persuade them to sell their houses.
Today, Urban Asset Group juggles between four and six renovations at a time.
Sometimes the homes are so neglected, Bayles said you can’t walk across the floors without stepping on junk. He will sweeten the deal for sellers by offering to clean out the house on closing day.
Bayles and his business partners don’t do any of the heavy lifting these days. A crew of roughly 15 contractors renovate the homes.
Electrical engineering, plumbing, and roofing are the most costly repairs, according to Bayles. He budgets between $US10,000 and $US15,000 for each of those essential areas.
Bayles recently turned his biggest profit yet. In 2015, he picked up a Midcentury-style, five-bedroom home in the gentrifying neighbourhood of Eagle Rock for $US917,000.
A squatter was living there. “The conditions were most like a haunted house, no joke. I actually thought of holding off on renovations to host one for Halloween,” Bayles said.
In October, Bayles sold the remodeled home for just over $US2 million — a record sale for the neighbourhood. Eagle Rock has a median sales price for single-family homes of $US900,000.
Source: LA Times