Condominium.853 Sq. Ft.1 bed | 1 bath into 1 + Den + Bath2160 Century Park East 1204N, Century City, CA 90067
1204N was acquired with a view of transforming it into a high end rental or my personal residence. This Bank of America REO 1 bed, 853 sf property was impacted by the fallout of the 2007-2009 Great Recession and as such was acquired all cash on an as-is basis. The building itself was struggling financially with many notices of defaults, making it hard to secure financing but this is often where value can be created.
1204N was acquired with a view of transforming it into a high end rental or my personal residence. This Bank of America REO 1 bed, 853 sf property was impacted by the fallout of the 2007-2009 Great Recession and as such was acquired all cash on an as-is basis.
The building itself was struggling financially with many notices of defaults, making it hard to secure financing but this is often where value can be created.
The property did have a lot going for it that subsequently made me consider it as an investment property. It’s located next to Beverly Hills with a mall being remodeled right next door. However, compared to others in the area, the building’s common areas and temporary financial and legal problems left a lot of potential buyers on the sidelines.
What made this such an incredible value proposition was the evolving demographic. Lots of young people were moving into the area and that brought an influx of new money and solid businesses. That inspired confidence about property values in the area climbing in the future. Also, unlike many of the other units in the building, the position of this unit within the property undoubtably gave it one of the most magnificent views.
Since it was purchased on an as-is basis, the property’s characteristics at that time weren’t great but we sensed that there was value there to extract. This was a unique unit situated on the 12th floor with a great 180-degree view. It also had a balcony. The banks were assigning value to this unit compared to others but that wasn’t exactly a fair comparison owing to the dynamics at play here. We saw inherent value.
The property’s condition at purchase was less than ideal. There was mold, outdated Formica countertops, and floorings that had been laid on top of floorings over the years. The unit’s hallway was a waste of space that could have been better utilized as closet space (a desperately needed addition) or a small den. Everything was in need of updating but there was plenty of space to execute that plan.
Initially, it felt that the property’s marketability wasn’t good but we did our investigations and found lots of what we call “ingredients” that we like to see when a property has potential that is hard to see. We worked with Slater Development (slaterdevelopment1957.com) who subsequently connected me to WDA Architects (WhittenDunn.com). We drew up some pretty great plans to renovate the unit.
We opened up the walls to get every square inch of space in utility. We redesigned the hallway into a mini-den that eventually became my son’s room. More previously wasted space from the hallway was also utilized to increase the size of the bathroom. New grey tiles were added for a modern look. The kitchen got a thick Caesarstone counter with high-end appliances from JennAir, including a wine fridge, a steam oven, and an induction magnetic range. We gutted it completely, added tons of new cabinets, glass doors, and installed an entertainment system with speakers throughout.
Howard Laks came into the deal and did some incredible work on the units. Prior to that, we look at what could be done with the units over months to minimize the cost while maximizing revenue. That surely didn’t mean being cheap. We added floor level patios, tore down walls both structural and nonstructural, and installed cabinets that were imported from Germany.
To evoke a sense of serenity, we added water features with fountains to drown out the noise of the traffic outside. 1/4 bathrooms were transformed into full baths. Skylights with tubes that reflect light down to the first floor were added to make the units appear more open and airy. This made a huge difference because there really is no substitute for natural light.
The stones in the bathroom were another great idea, creating a wall of stones that stuck out with a full floor to ceiling texture. The doors were designed to be painted purple to match the floral elements. The garages were also rebuilt so they could support garage doors and that each spot could fit a full-sized SUV.
French doors were installed for the patio to achieve a harmony between the inside and outside space. Even with the 1350-1490 sf floor plans, the patios made the space feel bigger and brought in more natural light. Some units had unique features as well, for example, one had a Juliet balcony.
Since the market grew stronger, we adjusted our plans as we waited on the permits. We finished the projects with additional amenities as the cost was now justifiable.
However, with Beverly Hills passing rent control, it made it difficult to extract the true value that we could. The deal itself was great and we would still own the property and purchase more apartments in the area only if Beverly Hills hadn’t passed rent control legislation.
Despite the dilapidated condition of the property, we were confident that this was an up-and-coming neighborhood that was evolving into even a more vibrant community. The younger demographic would result in a spike in demand for modern homes.
We capitalized on that opportunity to build out the property and it has eventually proven to be a hidden gem – and honestly one we should have kept.
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