A lot of properties on the market have the potential to be good potential flip properties if they are bought at the right price. It's the old saying that you make money when you buy real estate and not when you sell. Buying at a low price will often result in instant equity and leverage the property for sale in the future for a profit. Laguna Beach is one of the most expensive real estate markets in Southern California so it takes a lot of money to "get in the game" versus other neighboring cities. This also adds a lot of risk and carrying costs while the home is being maintained. Flip properties have been sensationalized on television as properties that need extra TLC and with enough sweat equity and quality craftsmanship to fix up the property the home can be sold at a profit. There are certain key elements to look for when buying a home in Laguna Beach.
First, does the home come with approved plans? There are a lot of smaller vintage homes that are on the market that are advertised as an "investors special" which just need to right buyer to have a vision for the home to make it a money producing property. Most of the time this involves adding on or building a brand new structure on the lot to maximize the square footage and to increase the real estate value. If the owner doesn't already have approved plans to build a new home be prepared to spend money and time to develop this. Laguna Beach is well known for being very strict with building laws and can easily take up to a year to get plans approved. There is also view restrictions in Laguna Beach that can limit your ability to build if your neighbors views are obstructed. All of this needs to be taken into account before buying a home, no matter how good the price may be.
Second, some flip properties are in need of a lot of work and have been stripped down to the bear studs. These have the potential to be great investment opportunities but financing needs to be considered. Lenders typically don't want to lend on properties that need a lot of work. These properties are often limited to cash only due to the risk the lender would have to take if they had to foreclose on the property. Additional cash will also be needed to fix up the property so all of this will need to be factored into the equation before deciding to purchase this type of property.
I have seen a lot of homes in Laguna Beach that have sold and then come back on the market at a much higher price and sell again. These tend to be the best "flip" properties in Laguna Beach. The rule of thumb is where is the property located, how is it priced compared to other similar properties and how desirable is it to other buyers. Upscale communities like Emerald Bay for example can have a great potential for profit if purchase correctly. Over the years many homes have been flipped in this community and selling for millions more than what they purchased the home. It's important to work with a local and knowledgeable Laguna Beach real estate agent who can knows the market well and can let you know the potential that any particular property may have. We have gathered a current list of properties that are being advertised as potential flip properties here. Not all of these properties are good potential buys so please consult with a local real estate agent first before making any purchase.