HOUSINGNEWS REPORT
LOS ANGELES SPOTLIGHT
Buying in lower-priced neighborhoods does come with rundown homes that require extensive rehab for a profitable flip, according to Chotkevys. “We do pretty much a full gut on the houses we buy. Most of those we buy are pretty nasty … they’re falling down, there are druggies living there,” he said, estimating a typical rehab in the Los Angeles neighborhoods where he flips costs $40,000 to $50,000 and can sometimes hit six figures. Chotkevys said he sells the homes he flips primarily to first time homebuyers with young families, typically using low down payment loans backed by the Federal Housing Administration (FHA). That’s a good bread-and-butter target market for home flippers in lower-priced Los Angeles markets, according to Phyllis Brett Chotkevys Co-owner, Helpful Home Solution that flips homes in South Central Los Angeles With us being where we are in the cycle, and us being very near the top, we’re not buying any big properties, anything close to a million and trying to flip those.”
Home flippers Brett and Laura Chotkevys purchased this Compton home in December 2015 for $175,000, put in $50,000 in rehab and sold in March 2017 for $330,000.
“At the low end of the market a lot of it tends to be low quality, that meaning bad location,” he said, arguing that the construction of the new NFL stadium in Inglewood will not represent a structural change to the area’s housing market. “I don’t think the stadium is going to be a big deal … I just know that the land around the Los Angeles Coliseum hasn’t really gotten better because of the Coliseum.” We Buy Cheap(er) Houses Home flipper Brett Chotkevys prefers operating in the lower-priced cities like Inglewood, where he has seen a recent upsurge in demand that he attributes to the coming NFL stadium. Chotkevys, who runs Helpful Home Solution with his wife, Laura, said he prefers those markets because he believes they represent less risk for his flipping business than do high-priced homes,
especially in a housing cycle that he thinks is close to its peak.
“With us being where we are in the cycle, and us being very near the top, we’re not buying any big properties, anything close to a million and trying to flip those … we couldn’t cash flow that,” said Chotkevys, noting he flips about 75 properties a year all across Southern California. “I’m comfortable with these areas in South Central and buying it for 250 grand. Worst case scenario is I could put a renter in it. “If I was doing a couple flips a year I wouldn’t worry about it. But when you are doing 20 at a time … it’s more of a risk management,” said Chotkevys, who started full-time investing in 2011 after working his way through college as a waiter. “I don’t think it’s going to drop, but nonetheless I want to have a backup plan on all my properties.”
ATTOM Data Solutions • P17
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