Flipping Houses in Seaside and Marina
We’re seeing investors generate great returns in Seaside and Marina, but the key is to know the neighborhoods, and have the best contacts available for the job. The following information should be verified by a general contractor and always be sure to conduct necessary inspections. This is simply an overview. First, we’ll cover what neighborhoods to look for. Then, we’ll consider the ideal condition of the property, characteristics of the property, and the best value add opportunities. We’ll end with an ideal timeline of events for successfully flipping houses in Seaside and Marina.
Neighborhoods
This is more important in Seaside than in Marina. The Seaside neighborhoods differ so drastically, while Marina neighborhoods are more consistent. When considering where to invest, focus on the areas that are in the highest demand that will bring the quickest turn around sale. You want to minimize your carrying costs, so a quick resale is important. The most attractive neighborhoods in Seaside are the edges of town.
- Side streets off Kimball like Fargo and Modoc
- Upper Seaside like Mescal, Granada, Yosemite, Highland, and Mendocino
- Northern Seaside like Military Ave, Mariposa
- Up and coming neighborhoods like Palm and Elm due to the development on Broadway
There are so many more streets that we can discuss in depth at your request, but in general – stay on the outside edges where the streets are wide, and the homes are nicely separated and not congested with too many cars.
Characteristics and Condition
When considering a purchase, you want to find a property that has good bones and needs cosmetic updates. Minor foundation issues might not be the end of the world with a good contractor, but they’ll hurt the budget and extend your timeline increasing your holding costs. The ideal property would have some life left on the roof, but this is hard to find with the kinds of properties you’ll be looking for, so factor in a new roof when you’re considering you’re a general scope of work. You’ll be working with Seaside roofers, so it’s a different price point than Carmel.
Find a house that fits in with the median market features – three bedrooms, 2 full baths, 1100-1600 square feet. If you find a great deal but it only has one bath or 1.5 baths, you have the second bathroom protocol that allows you to pay the city for rights to a second bath(at the time of writing this article). Best to find a deal that already has that bathroom, but 1 bath is not a deal breaker depending on the other factors involved. Don’t be afraid of an older house – most of the houses in Seaside were built in the 50’s and 60’s. Paint goes a long way! The lot size doesn’t really matter. Some lots in Seaside are 3600 square feet, others are larger at 5-7,000. Just keep in mind that the maximum square footage allowed is determined by the lot size, but expanding square footage is not what we’re looking to do when optimizing our return on investment, so the lot size doesn’t really matter as long as there’s some space for the dogs to run around and the kids to play.
Plumbing/Electrical
Ideally you’ll want to see a majority of copper piping with minimal galvanized steel. Some of the old houses still have knob and tube wiring, which can be costly to replace, but the climate in Seaside is much more forgiving than if you had knob and tube in say Carmel Valley where it gets hot in the late summer and fall moths.
Foundation
The ideal foundation would have a crawl space. Slabs make it difficult to re-route plumbing and fix serious plumbing issues because you might have to tear apart the slab, which can be very expensive. If the house is set on a concrete perimeter and you have a crawl space to work with, you’ll have a better chance of avoiding those kinds of large capital expenditures.
Adding Value and Spending Wisely
There are so many ways to spend on unnecessary bells and whistles that you simply don’t need because they don’t add value and increase your return. When you spend a dollar you want to be making at least two dollars back, so invest in cost effective improvements, and don’t go with the best possible finishes like you would on a Carmel flip. This is a much different market. For example, instead of using Carmel stone or flagstone for the patio, use Home Depot pavers. They look nice and neat and they are equally functional, and that is the goal. Don’t buy marble counter tops, buy granite. Don’t buy hardwood floors, buy luxury vinyl plank – it’s durable and looks just like hardwood. Don’t buy an expensive vanity, buy the one from Home Depot for $300. However, don’t be afraid to spend in areas that really count like Moen faucets and soft close cabinetry. Stick to colors that will appeal to the masses – whites, greys, and browns. If the house has old carpet, peak under the carpet during your walkthrough and see if it has original hardwood underneath. If it does, sand it down and refinish it! Original hardwood floors give character and complement the other updates you’ll do. Paint the inside and outside and make it look fantastic. Taking down walls can be expensive, but when done effectively, it can add great value to the home. If you were to take a wall down or open it up, would it give you an ocean view from the kitchen? This kind of investment could produce a great return. For landscaping, use bark, decomposed granite, succulents and some potted plants to create a nice outdoor living space without spending a fortune. The key is low maintenance when it comes to effective landscaping so as not to eliminate a buyer demographic that wouldn’t want to maintain or spend money watering a lawn and many plants.
It’s important to work with a contractor who has worked with other Seaside/Marina investors and knows which items add value and which hurt your bottom line. They should be able to walk the property with you before your contingencies are removed and give you a scope of work so you can strategize your investment and know your figures before closing on the property. We have these contractors!
Timeline and Strategy
So, what comes first? Find a deal. Sometimes there are great deals on the MLS, other times it takes some work from your agent. Drive neighborhoods with your Realtor and make notes of addresses that could be potential flips. Ask your agent to contact those homeowners and see if they would consider selling to you. Be sure to get pre-approved by a local lender who knows the market and understands what you are looking to do. Some properties won’t be able to be financed because they are in too poor of condition, but try to find one that can. Or, you could seek private financing or hard money loans at higher interest rates if the numbers still work.
Once you find a deal, walk through and make notes on items that need to be repaired or renovated. Make some rough calculations with your Realtor and see if it’s worth pursuing. If it looks promising, bring the contractor out to walk the house with you and your agent. Get an itemized list of repairs and if the numbers work, make an offer.
Once you get into contract, have your inspections – home, pest, roof, etc… renegotiate the price or terms if necessary, and close. Make sure the contractor is prepared to start work quickly so you can begin the renovation as soon as possible upon closing escrow. Once the work is done, list it, sell it, and profit.
When you’re considering a flip in a market with some level of uncertainty like the one we are in, it’s important to have other exit strategies if the market were to go down during your project. For example, if you couldn’t sell it for top dollar, would you be able to rent it until the market corrects and goes back up? These kinds of considerations are important because the market is not appreciating as rapidly as it was from 2014-2018, so it’s good to be cautious and thoughtful about the entire process.
Let us know if you would like further guidance or have questions about flipping houses in Seaside and Marina.