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The Craziest Ceiling In Compton | Flipping 101 | HGTV

[MUSIC PLAYING] This is “Flipping 101.” I missed you guys. What’s up, man? Hello, hello. Look at this place. Looks like we’re back at it. Come here. Boom! So tell me about it. It’s a 3-2. It’s about 1,200 square feet,
and we purchased it at 334. And of course, we’re
in the city of Compton. In Compton.
Yes. The comps that you
found– they’re pretty close to this house? One right in the corner,
one a couple blocks away. The comps in the area are 520. But compared to ours,
I think we feel very confident we could ask 500,000. I see new-construction
houses being built up the street, which
means that buyers are gonna be shopping in the area. [MUSIC PLAYING] Oh! I told you. I have never, ever
seen this before. You know what, though? Someone spent a lot of
time to make this happen. Seriously, someone
was here for weeks. This is pretty much the living
room, and then the dining room here, with the kitchen
over here to the corner. What were you guys
thinking about this wall? We’re thinking of
opening it up and– Taking it down. Yeah, opening up. This is really small. It’s a full gut, pretty much. So this floor is beat up. The subfloor’s shot. The ceiling’s shot. I would open up that
living-room wall, and when you demo this kitchen
wall, you can add a peninsula. The entire space
will feel bigger. So we’ll come here. The bathroom. Not bad. Not a bad size. But once again, full gut. [LAUGHS] You know what? This isn’t a bad bathroom
at all, actually. Once you come in
here, a new floor. Retile the whole thing. I don’t see any major problems. The first bedroom right
here, off to the right. The size itself isn’t
bad, but the flooring feels really uneven. Right now, walking
through the entire house, your foundation
feels like it’s shot in so many different areas. So if you’re gonna
stay at 80K, you better hope this isn’t a big job. Oh, they just love these
very interesting ceilings. What is that? That’s a shed. That’s gotta go. Yeah, that’s going. This is bedroom three and four. Three and four. Well, three is
somewhere in here, but we’re gonna make it
officially a three and four. This, 100%, looks like
an unpermitted addition. So please tell me you
verified the permit. We checked, and it’s permitted. We’re gonna close the
door to the living room. Then, we’re gonna borrow
space from the second bedroom to create a new hallway
down the middle. Door here for this room,
door here for that room. And there’s another
restroom back there, and that’ll be a master. So this right here is gonna
become the master bedroom. Don’t look up, though.
Don’t look up. Don’t get scared. Oh my God. You have major roof problems,
major roof problems. You might have
plumbing problems. You might have
electric problems. So I think there’s
a lot of stuff here that is gonna come up that’s
hidden behind all these walls. This is a huge yard, guys. Where’s your garage? We don’t have one. You guys don’t have a garage? We don’t have a garage. Do the comps have garages? They do have garages. Buyers are gonna see a missing
garage as a huge negative, so we need to make sure
they see a positive instead, which is a big back yard. I want the couple’s
contractor, Mac, to weigh in on the rehab
budget as soon as possible. What’s the best-case scenario? 80. That’s what we thought. OK, that’s what we estimated
for going in on this project. But we could go as high as 120. So how much did you
pay for the house? 334. 334. If everything goes perfectly,
and that is a big “if,” your rehab is 80,000. 334 plus 80 is 414. You add 25,000 in closing costs. How long do you think this
project is gonna take? Five months? About five months, exactly. Mortgage payment? 3,500 a month. 3,500 a month, five minutes– 17,500. So your break-even is 456,500. But if your contractor’s right,
and the reno goes up to 120, your new break-even is 496,500. And what are the comps? 500,000. Do you see how this is scary? Yes. [MUSIC PLAYING] We caught a huge break
on the foundation issue. It turned out that the floor
was just installed incorrectly. We did have to replace the
roof, but we already knew that. So now we just got
to start framing and turn this 3-2 into a 4-2. Here we are. All right. This is it, Tarek. This is one of my favorite
parts about flipping houses, when you come into a
house that’s down to the studs. This looks awesome. Hey.
What’s up, buddy? We’re here at the property. Everything is looking good. But we did get a
little bit of bad news. What do you mean, bad news? The contractor
just told us that– you know the part
where we’re adding the third bedroom and the fourth
bedroom and the master bath? It might have to come down. Are you saying
it’s not permitted? Yeah, yeah. When we first walked
that property, do you remember I stepped
down into those bedrooms, and I was like, this
doesn’t feel permitted? Yeah, I do. And you said what? And I said, Tarek,
it is permitted. Well, why did you say that? I got the information
from my agent. I looked online. Everything seemed to pan out. I’m gonna teach you
something right now. Looking online means nothing. Talking to agents means nothing. You want that in writing. You need that in writing. If there’s an addition with
no permits, that’s worthless. The number one thing you should
have done is gone to the city and verified those permits. It turns out, back in
the ’70s, the owners pulled permits for
the back addition, but they never finished it. So right now, we don’t have
no idea as to when it’s gonna get inspected and approved. But now we have to stop work,
and holding costs keep rising. So this will go in both the
floors and the bathroom. And then, we’ll put it on the
back side of the peninsula. This will go in the showers
and on the backsplash of the kitchen. And then, of course, those
are gonna be the cabinets with some black hardware. You guys are designing today. I like it. We are up and running again. We got the permits approved,
and now we’re moving forward. Your mistake actually
pushed us back two months, and we ended up
spending $7,000 extra. I’m worried that we’re not
actually gonna be making any profit at this point. Design-wise? Nailed it. It looks awesome. Functionality-wise, I
don’t see any cabinets. And really, you should have
upper and lower cabinets across this entire wall. Where do you store your stuff? That’s not storage, right? That’s underneath the sink. Cleaning supply. So where do you
store your stuff? [MUSIC PLAYING] Now they’re focusing on
the finishing touches, getting the house staged,
and getting it on the market. So today we need to
figure out what we’re gonna list this house for. You paid 334,000
for the house, put 88,000 into the construction. It shows. It looks really, really nice. The one thing that’s gonna kill
you here is your carry cost. You spent $29,000 on the
mortgage for the house. You’re gonna about 25,000 in
closing costs and commission. Your break-even’s
gonna be 476,000. I’m thinking 520,
just ’cause I want to be done with it already,
and I think a lot of people are gonna come for
that price range. I’m thinking, let’s go
with the highest comp, 535. 535? OK, we’ll see. But the new-build houses
are right up the street, and they’re the
biggest competition. I’m just hoping that buyers
will look past the cabinet space and the
kitchen and just love the design and the back yard. But honestly, as of
right now, I don’t know how they’re gonna react. Hi. Oh, hi. Come on in. [MUSIC PLAYING] You can see there’s a lot
of light from the window. It’s amazing how far
this house made it, man. Woo-ey! Just looking at the
ceiling and not seeing that ugly popcorn sticking out. It’s very modern. Very. Look at the sink. There are no cabinets at all. I have a whole set of pans
and all kinds of stuff. See, I told you, man. You can’t fool the buyers. OK. Look at the tile
of the bathroom. Wow, I love the bathroom. It matches the peninsula. This tile is really
not my favorite. And then, here’s the bedroom. Nice size. Oh! Oh, look at this. This is my master bedroom. There it is. She said, this is mine. Did you hear that? Beautiful. Beautiful. I love this shower,
because this. Look at the nice glass. The master bath has that
super high-end feel, and it’s way better than
the new construction. I just hope it’s
enough to convince buyers to make an offer. But I like the other
bathroom better. This is huge. See?
The first thing the kid said. They love it. This is a huge yard. You can put your play structure. Yeah, and I can help you garden. Next to the permits,
leaving that yard as dirt would have been the biggest
mistake in this entire flip. Even though the
house looks great, I still don’t know
if we’re gonna be able to pull buyers away from
those new-construction homes right up the street. We’re just gonna
have to wait and see.
Video source: https://www.youtube.com/watch?v=rXO-hFIi8E4

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