Efficient and Profitable Flip in Los Angeles, CA.

This investor did an excellent job of buying the property for the right price and making the appropriate repairs for the market conditions. There is a common saying in the real estate industry, “Money is made when you buy, not when you sell”. Essentially, it means that the price you pay for a property is one of the most important factors determining your profit later on. In the business of flipping, of course there are other very important factors such as keeping your cost of renovation down, making the right improvements to add value, the efficiency of your flip, market timing, and the quality of your support and management team; but the single most important factor for most investments is still price. In a competitive market, with low inventory, the ability to find properties at the right price is becoming increasingly difficult. At Lantzman Lending we get A LOT of loan requests every day, and the most profitable transactions are those that are purchased off market either through an agent, wholesaler, or directly from sellers. Once a home is on market, then you have a lot of eyes on it, and you are going to be buying the home for a “market price”.

Los Angeles Market Update

The Los Angeles real estate market, after taking a dip in 2022, has roared back to life in the past four months. Home prices topped out in July of 2022 with a median home price at $945k, but then proceeded to have 9 consecutive months of price reductions until April of 2023 when the market bottomed out a median home price of $884k. This was a 7% drop in home prices over that span. Since then the prices have rebounded up to $916k and the trend is certainly poised to continue in that direction in the short term.

Los Angeles Median Home Price

***Lantzman Lending Tip*** As a fix and flip investor, it is important to stay up to date on trends in the market and developments in the economy that might affect home values in the short term. In a competitive environment with fluctuating home prices, your profits can evaporate quickly if the market prices decrease. We have seen home prices dip a few times over over the last few years, and if you purchased right before the dip, then you would most likely be struggling to make a profit on that flip. In addition to economic changes, home prices are also subject to seasonal changes. As we enter the winter months, be wary of the effect seasonal changes may have on home prices in your market. Most market see a dip in the median home price as buyers take a break from the market for the holidays.