Thursday, December 4, 2014

Remodel - Doing the Flip

Remodel

Doing the Flip

The Las Vegas real estate market

Story by Howard Riell

Photography by Colleen Chalmers of Giggle Box Photography

Flipping—meaning the buying, rehabbing and reselling of houses—has become trendy across America. And nowhere has the art form been as finely honed as right here in Las Vegas.

Just ask Anthony Ypil. 

“I’m not a typical real estate broker,” admits Ypil, the principal of Pathmark Realty LLC in Las Vegas. “I’m a small brokerage and more of a one-man shop. I work for a local investor, and I’ve been buying and flipping homes since 2009.” During that time, he estimates he has flipped close to 500 houses. His five-year-old firm includes four agents.

When the housing market started to tumble, Ypil began to work with various banks and their REO (Real Estate Owed) inventories. “I soon met with some investors—brothers Phil and Tom Boeckle of PT Corp. in Las Vegas—and started buying this stuff at auction rather than waiting for the banks to send it on to the market as an REO.”

Ypil, who has supplied homes for the TV show Flipping Vegas, bought a great many houses at auction for several years, then began tapering off in 2013. Now, he works this way: “I find the homes. I buy the homes off the market. I submit offers, probably a hundred and some per month. Once I get an accepted contract I go out to the house, walk it and see how much is entailed. Then I decide if I want to proceed or not. 

When he decides to buy, Ypil is the one who formulates the design. “I decide what’s changed, what’s not, what stays, what goes, what colors go back in, what plumbing fixtures, lights, landscape, counters to chose—everything.” Once the design phase is complete, he turns to a general contractor to do all the work.

The houses Ypil buys generally fall between $200,000 and $2 million. On average, he spends between $35,000 and $40,000 per remodel, with a goal of realizing a 10 percent to 15 percent margin on the resale. With an average 3,000 to 4,000 square foot home, he says the process takes about four months from purchase to resale. “Some of them I’ll hold six to nine months; some I can get rid of in a month.” The contracting work takes about 45 days.

Repainting is always a given, as is new flooring, both tile and carpet. Rehabs also commonly include all-new countertops, refinished cabinets, new lighting and plumbing fixtures, as well as signature decorative touches in tile and glass for the kitchen, master bathroom and fireplace. “I do more contemporary design,” Ypil says, “so I’ll use vessel-style sinks and chrome tower faucets.”

Total Redo

The most popular communities for house flipping, Ypil reports, include Summerlin and parts of Henderson—Green Valley, MacDonald Highlands and Seven Hills/Anthem.

One recent project for Ypil and his partners was the $2 million dollar home at 1683 Tangiers Drive in the Dargon Ridge Country Club area of MacDonald Highlands. The Boeckle brothers purchased it nearly a year ago, in December of 2013. “That was a big house, over 7,000 square feet,” Ypil recalls. “We bought it as an REO, and it was completely stripped.”

By completely stripped, he means just that. “It took six months just to get it back to condition to market it again. When we bought it all the cabinetry was gone, all the counters, all the plumbing—just everything. I had to redo the pool and the pool deck, all the AC units were missing, all the pool equipment, appliances. It was like building a house starting from the dry wall.”

The reason for its stripped-down condition? “The previous owner had fallen on hard times financially,” Ypil explains, “and he had just started stripping the house for petty money.” The price that the partners ultimately paid for the house was $1.25 million; remodeling costs added another $400,000 or more.

“Fortunately, I had a lot of money to work with, and we were able to get it at a pretty good price, Ypil recounts. “I predicted at least a six-month marketing time to sell it. I listed it in June and went to contract in November, so it hit the time frame that we had targeted. Then it took six months to get it up to speed again.”

Ypil, 41, views the Las Vegas housing market today as having “definitely become a little slower. It’s tailed off. There is not the buying activity that there used to be. For the longest time it was a seller’s market, but it definitely has turned the tables, and become more of a buyer’s market now. It is taking longer marketing times to sell homes.”

The year ahead should be very much like the year just passed, Ypil suggests. The real estate market “definitely has slowed down, and prices have stabilized. If anything, they may have started to drop a little bit. Inventory has come up on the market, hold times are longer on homes, and I see a very stable market. I don’t see anything fluctuating in any one direction at all.”