Much to many people’s surprise, home flippers are alive and well and making a boatload of money in our market place. Now there is even a new variation called “flipster” which means a “hipster” who flips homes — usually selling to their own counter-parts.
These are the millennial flippers: stereotypically wearing retro clothes and “funny” hats and sporting “cool” eyeglasses. They got the real estate bug and started buying and selling homes to their friends who didn’t have the time or vision to make the homes look “cool”. It’s now become a real niche in the real estate market.
Paul Habibi, a professor at UCLA Ziman Center for Real Estate, said he’s seeing a growing number of flipsters.
“In my classes, I always talk about ‘eating your own cooking,’” Habibi said. “It’s easier to design something that’s palatable to both you and the end user. Hipsters know what other hipsters like best.”
Hipsters are a reincarnation of the 1940s “hepcats” or ’50s “beatniks” : they want to create a style outside the cultural mainstream. Many of the trends are very green: they brought the concept of a “walkability score” into search criteria in real estate. They are behind the resurgence of bicycles in car dependent Los Angeles.
In general, these hipster are movers and shakers: their flips take from four to six months to complete, with end sale prices ranging from $750,000 to over $2.4 million. The buyers? All are other hipsters and millennials.
Some of the successful flipsters include older flippers who were earlier into the concept and are benefitting from the new hipster-centric neighborhoods. The first tell-tale sign of a flipster house is the “flipped” fence. Instead of a traditional vertical fence, flipsters use horizontal board fences in front yards. It’s a calling card for a flipster home and an advertisement for buyers who can then expect an upgraded, “hip” house.The fact that other neighboring home owners are now copying that look is the proof of the success and shows that this is more than a passing fad.
Flipsters source their looks through Pinterest boards and home design sites. Designs are skillfully executed by trusted contractors. These young 20 somethings get started with borrowed money from family for their initial flips and then use hard-money loans for the next phase. After establishing a track record, they get investors and can funds multiple flips at the same time. for the bulk of financing.
Flipsters love the “forgotten” areas close to downtown LA. There they can find cheaper homes in highly urban areas — perfect for young buyers who don’t want long commutes or a suburban setting. Those neighborhoods are gentrifying fast. Some like Boyle Heights are pushinging back against the wave of change but other areas are well on the way to the conversion.