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Why this Mid-Century Fix won't Flip

by 5280mod last modified Aug 14, 2011 10:43 PM
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Why this Mid-Century Fix won't Flip

Posted by 5280mod at April 11. 2006
Here is a look at how NOT to update an architectural classic!
This home is located in Arapahoe Acres. It has the classic "U" shape with a courtyard in the center,
almost 2000 square feet with a 2 car garage! Each wall framing the courtyard is floor to ceiling glass. The home has recently been completely updated including wiring, plumbing and HVAC. Sounds like any Modernist's dream come true, right? So why has it been sitting on the market for 6 months?

THE HISTORY This home sold in February of 2004 for $310,000. It was acquired by an agent/investor who went in and replaced all the wiring, plumbing and HVAC, along with the kitchens and bathrooms. Basically it was gutted. It came back onto the market in October of 2005 and I was anxious to see how they had brought this gem into the 21st century. THE REVEAL From the outside, things looked promising. The trees had been shaped, the bushes pruned so more of the exterior could be seen. I braced myself as I stepped up to the courtyard gate, believing there was a good chance I would fall in love with the home and only be able to covet it from afar... As I stepped into the courtyard, I was immediately taken with the glass....nothing but walls of glass on 3 sides. I could see into the main living/dining areas and the master bedroom (making me think my housekeeping skills would be put to the test in a home like this) Yes, everything has been updated (with the exception of maybe the original fireplace.)

THE PROBLEM

Clearly the investor had gone with the "traditional fix & flip wisdom" which says keep things neutral and generic to appeal to the most buyers. The walls are beige and the ceiling white (sloppily painted I might add.) The humdrum oak floors don't compliment the woodwork or fireplace.

And the kitchen...when I walked into it, my first thought was "I could be standing in any 2005 mcmansion, bleh!"

THE RESULT

Clearly this is not a "traditional home" designed to cater to a mass audience and the "traditional wisdom" does not apply. Beige walls and Home Depot cabinets are not what a potential buyer expects to see in this type of home.

When this home came back on the market in October of 2005 it was priced at @ $745K. A price that was beyond ambitious in the current market. After two weeks the price dropped to $649K. Now it has just dropped to $565K.

Once a home has been on the market for more than 3 months, most agents will overlook it, assuming either a) there must be something wrong with it, or b) the seller has unrealistic expectations.

THE LESSON

As one of my purist clients put it... "It's a shame that this redo will have to be redone!"

Unfortunately, I see this quite often in architecturally unique homes. Investors are wearing dollar sign blinders and don't take the time to understand their market.

More information on this property. Other Modern Homes for Sale

Re: Why this Mid-Century Fix won't Flip

Posted by Craig Mayer at April 11. 2006

I have shown this property to clients several times and they all generally concurr with Shannon's assessment: Its a shame that they lost some of the MCM character that makes this home special.
However, it has been completely upgraded with all new double paned windows (lots), plumbing, electrical, heating and air conditioning, and insulation (most AA homes have none). These improvements alone probably cost the seller over $150K. So, clearly the starting price of $745K was just a pipe dream - the neighborhood does not justify such a price even if someone was willing to pay it. The current asking price of $565,000 is more realistic and within the recent trend of homes selling in the neighborhood for $250-$300 per square foot.
It still is a wonderful modern home and worth seeing.

Craig Mayer
Mile Hi Modern
Distinctive Properties Ltd.
303-316-2161
craig@milehimodern.com

Re: Why this Mid-Century Fix won't Flip

Posted by Todd Carpenter at July 12. 2006

Well, it flipped. The house is now sold. Besides the kitchen cabinets, I really liked that home.

Re: Why this Mid-Century Fix won't Flip

Posted by Gregory La Vardera at July 13. 2006

The kitchen could probably be revived with a cabinet door job. The bathroom is sort of mcmansiony too, but they could have ruined much worse than they did.

Re: Why this Mid-Century Fix won't Flip

Posted by 5280mod at July 25. 2006

It flipped, but I don't think the investor would call it a resounding success.

After being on the market for 8 months, selling for $210K less than the asking price, paying at least $16,000 in commissions and carrying costs from February of 2004, I don't think they turned a profit.

Yes, this house's architectural features make it very difficult to ruin, but I hope there is a lesson here for would be investors to take a different approach with unique homes and learn a little more about their market.

Re: Why this Mid-Century Fix won't Flip

Posted by Craig Mayer at July 30. 2006

Here's a related fix N flip story:
We have a nice Brad Wolff Eichler-style home listed for $330,000. It's 1600 sqft with 3 beds and 2 baths; and has classic MCM details like vaulted open beam ceilings, glass walls, courtyard, mahogany paneling...etc. However, the home suffers from dated kitchen and baths. Click here to see photos: http://www.milehimodern.com/1314sEudora.htm

When we listed the property, we priced the home $50K below what updated or remodeled homes in the neighborhood have been selling. We have been on the market for 90 days and have had 50 showings but no offers. All of our similar but updated or remodeled homes in the area have sold for higher prices.

Feedback from our clients as well as those of other Realtors suggests that when given a choice between a remodeled property or a dated property, Buyers will choose the remodeled one - even if the price is higher and the remodel doesn't fit the architecture. Most Buyers seem to be afraid of the hidden costs of taking on a remodel themselves. And in today's market in Denver, professional fix-N-flippers can only purchase properties that are way under valued - which this one is not.

Therefore the Seller has decided to take the property off the market and redo the kitchen and baths. We are trying to help him choose appropriate materials and finishes but at this point we don't know how it will turn out. Regardless, when the project is finished, the property will go back on the market at a new price that will be 2x what the remodel cost - probably something around $360K. So, if you want to save some money and put your personal remodeling touches on this property, contact me as soon as possible!

Craig Mayer, Mile Hi Modern
Distinctive Properties Ltd.
303-316-2161
craig@milehimodern.com

Re: Why this Mid-Century Fix won't Flip

Posted by Jane Jagger at May 05. 2009

Previously Craig Mayer wrote:



Here's a related fix N flip story:
We have a nice Brad Wolff Eichler-style home listed for $330,000. It's 1600 sqft with 3 beds and 2 baths; and has classic MCM details like vaulted open beam ceilings, glass walls, courtyard, mahogany paneling...etc. However, the home suffers from dated kitchen and baths. Click here to see photos: http://www.milehimodern.com/1314sEudora.htm

When we listed the property, we priced the home $50K below what updated or remodeled homes in the neighborhood have been selling. We have been on the market for 90 days and have had 50 showings but no offers. All of our similar but updated or remodeled homes in the area have sold for higher prices.

Feedback from our clients as well as those of other Realtors suggests that when given a choice between a remodeled property or a dated property, Buyers will choose the remodeled one - even if the price is higher and the remodel doesn't fit the architecture. Most Buyers seem to be afraid of the hidden costs of taking on a remodel themselves. And in today's market in Denver, professional fix-N-flippers can only purchase properties that are way under valued - which this one is not.

Therefore the Seller has decided to take the property off the market and redo the kitchen and baths. We are trying to help him choose appropriate materials and finishes but at this point we don't know how it will turn out. Regardless, when the project is finished, the property will go back on the market at a new price that will be 2x what the remodel cost - probably something around $360K. So, if you want to save some money and put your personal remodeling touches on this property, contact me as soon as possible!

Craig Mayer, Mile Hi Modern
Distinctive Properties Ltd.
303-316-2161
craig@milehimodern.com



 

Re: Why this Mid-Century Fix won't Flip

Posted by Karen Volz at May 19. 2010

Did it flip?  The brick is an eyesore to me but perhaps or apparently desired by the buyer....

Re: Why this Mid-Century Fix won't Flip

Posted by Matt Kent at July 22. 2011

It is really a shame that a redo will have to be redone; imagine the amount of money spent on the flooring, wooden furniture and decorations. I feel really sorry for you, and I do hope that you will be able to find a buyer for your house soon!

Matt

http://northchicago.floorcoveringsinternational.com

Re: Why this Mid-Century Fix won't Flip

Posted by John Christmas at August 14. 2011

Humans are very visual creatures as, research often justifies. As such, lighting or illumination is always key to the creation of aesthetic or practical effects. Indoor lighting is a form of fixture or furnishing and a key part of interior design. Most designers emphasize lighting as an intrinsic component of landscaping. Do also consider the use of paint colours that augment the use of light. For the home described, it seems like it is in need of some attention to its design in terms of lighting – both indoor and outdoor. It is especially relevant when it has the classic "U" shape with a courtyard in the center, with little attention to lighting on its exterior – how will the house look at night from the afar? I believe, with some good attention to its lighting and colour, it will certainly be as beautiful as any Modernist’s dream come true!

Regards,
John Christmas

https://www.ldj-lights.co.uk/

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