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    Home Tips for South Bay Sellers & Buyers

    November 2, 2022

    By: Richard Haynes
    Home Tips for South Bay Sellers & Buyers

    If you have been following my newly reimagined Instagram page, then you know I am working to share more on-camera real estate tips, strategies, and data.

    This weekly blog allows me to share market happenings and insights in a different way from Instagram, much like I can vocalize unique stories and strategies on my podcast. Different platforms allow different forms of real estate content.

    Last week I posted advice on Instagram that I would like to elaborate on this week for my blog readers. The first topic is for those of you thinking of selling, while the second topic is for all you savvy buyers contemplating whether or not an income property is the right decision for you.

    Sellers – Always Paint, Carpet and Stage

    We were able to highlight this advice well on Instagram in less than 45 seconds – but for my blog readers, I want to share the reasons behind why we always recommend paint, carpet, and staging for all properties. The impact it has on photography and showings is immense which ultimately leads to a higher priced sale.

    Take a look at this example in the P.V. Drive North submarket of Rolling Hills Estates:

    18 Santa Bella Road

    • 4-beds, 3-baths, 2,339 sq. ft., 29,302 sq. ft. lot
    • Asking: $2,380,000 (May 2022)

    This was the first iteration of this trust sale listing that was owned by the same owners for multiple decades. The home was in the desirable Ranchview pocket with a huge lot and pool to boot, however, it was in dire need of some TLC. Its age and condition made it hard to envision what the home could be with some thoughtful work.

    Without paint, carpet, and staging it is not only tough for professionals to find inspiration, but nearly impossible for your typical retail buyer.

    As a result of an empty home and no direction, this original listing cut $180,000 six weeks later, and then another $230,000 in the following six weeks.

    That is a start price of $2,380,000 and reductions that brought it down by $410,000 in total to $1,970,000. Ouch. Eventually, the listing was pulled after four months on the MLS.

    Just 11 days later, the property was re-listed after painting and staging. What a world of difference it made!

    18 Santa Bella Road

    • 4-beds, 3-baths, 2,339 sq. ft., 29,302 sq. ft. lot
    • New Asking: $1,999,000 (September 2022)

    These affordable investments of interior paint and staging brought the home to life as you can see. It is so simple, so cost-effective, that the results are hard to deny.

    What eventually happened?

    The property went to escrow just eight days later for well-over asking, closing at $2,325,000 which was almost its full-asking price back in May without carpet and staging.

    I always recommend paint, carpet, and staging. Not everyone takes this advice for various reasons, but in almost all instances the juice is certainly worth the squeeze.

    If you are in the market to sell, this is the bare minimum preparation in our local South Bay markets.

    And if you are a savvy buyer, go out and find those fixer properties that have failed to put in the work and cut their price multiple times – if you make a low-ball offer, you might be able to land yourself a fabulous deal. With a little vision and light rehab, homes can come roaring back to life.

    Savvy Buyers – Purchase Multi-Units

    Another topic that I have been working to convey on Instagram is the benefits of income properties for homeowners. This market is expensive, mortgage rates continue to climb, and there is a lot of uncertainty around home values due to a rapidly shifting marketplace.

    How do you make your home more affordable and lower your risk to depreciating prices?

    The answer is simple: income properties.

    I preach this option to many of my first-time home buyers and investors. Let’s explore this concept with an example of my clients that recently took this avenue and are now in a great position.

    26247 Ocean View Avenue

    • Lomita Pines, two detached units, corner lot
    • 2,500 sq. ft., 7,651 sq. ft. lot, two separate garages/entries/backyards
    • Sale Price: $1,200,000

    For those of you not familiar with Lomita Pines, this is a special pocket of Lomita located south of Pacific Coast Highway, bordering Rolling Hills Estates. It is called Lomita Pines because of its huge pine tree-lined community that feels like an extension of P.V.

    The positives of this property:

    • Corner lot with detached units with their own private yards
    • Owner vacated 2-bedroon rental unit at close of escrow
    • Separate garages and driveways
    • Owner’s unit easily converts to a 3-bed and the garage to an ADU
    • Upside for a potential lot split thanks to Lomita’s progressive codes
    • Qualifies for FHA financing at 3.5% down – a dream

    My clients had the 20% down payment, but why spend it when you don’t have to? My advice is to use that saved down payment money to increase cash flow/rents, make property improvements to increase the value, and mitigate market risk while setting up for long-term wealth creation.

    Here are the numbers at a 6% mortgage rate:

    • $6,930/month P&I
    • $820/month PMI
    • $1,000/month property taxes

    Total ownership costs: $8,750/month

    The newly vacant 2-bedroom rental unit will bring in around $2,300/month and my clients are going to take their down payment savings to convert the garage to an ADU and bring in another $1,500/month.

    That total rental income comes out to $3,800/month. It lowers their overhead to $4,950/month.

    What’s more, there is a second living area in the home that can be easily walled-off and permitted as a 3-bedroom in the main house with very little work.

    So, they essentially acquired a soon to be 3-unit property and will have a 3-bedroom home to enjoy with a private backyard and ample street parking in the most coveted area of Lomita.

    They believe that their property improvements will increase the value and allow them to refinance down the road to capture 20% equity to remove mortgage insurance, but for now, are perfectly content with their payment to enjoy living in their 3-bedroom move-in-ready home.

    Many believe interest rates will come down at some point, so not only do my clients expect to eliminate mortgage insurance, but they are hopeful to get a lower rate down the road. Once they can refinance, whether it be short-term or long-term, they will consider renting their 3-bedroom home and repeating the process again with a 5% or 10% down loan.

    This is what the new numbers might look like down the road at 4.5% refinance rate.


    • $2,300/month 2-bed
    • $1,500/month ADU
    • $3,200/month 3-bed


    • $5,870/month P&I
    • $1,000/month property taxes
    • Cash Flow: $130/month

    Sure, this is a simplified metric as their will be upkeep to the property, insurance and vacancy, but rents could be higher in the future or interest rates could go back down to the 3%.

    The beauty of this purchase is that clients can greatly reduce their home overhead thanks to a rental unit, add more value by converting another unit, and can rent out their home to come close to breaking even and certainly cash flow down the road. And remember, this is all being done by putting very little down and with ultra-high interest rates!

    We could go into detail about the potential lot split to sell off the 2-bed residence and keep the home and ADU, but I’ll save all that for another time.

    This is one of the few ways in the South Bay to hack affordability, mitigate risks of a falling market or shaky economy, and owning a real income property for decades to create generational wealth. If my clients repeat this every three, four or five years – it is an amazing financial planning strategy that does not take a degree in rocket science.

    Final Thoughts

    How did I do on the “Instagram vs. Blog” write-up this week?

    I enjoyed writing this because normally we skip details on Instagram to get the point across quickly due to the nature of the platform, but on the blog I am able to dive deeper.

    If you liked this post and enjoy the deeper insights send me a message on my next Instagram post and I will be happy to provide further value and information.

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