Flipping out
Clayton and Libby Dennis purchased a home that was flipped and renovated. The couple bought the house in part because of the location, history and detail.
New tiling, vanity and other details went into creating a whole new bathroom for the flipped home on South Main Street in Washington.
Before house flipper Dennis Locy transformed a house in Washington, it was in complete disarray. Locy purchased the home for $2,082, invested close to $180,000 and sold it for $235,000. Locy worked to use some of the past pieces of the home in the renovated version.
Dennis Locy, left, and Joe Eldridge are in the middle of drywalling the interior of a home in South Franklin Township that they are remodeling to sell in several months. The process is called flipping a home. This is their eighth home they will have flipped for a profit.
Dennis Locy and Joe Eldridge are remodeling this home in South Franklin Township to sell in a few months. The project includes new siding, new windows and a completely new interior.
Dennis Locy of Prosperity works on sealing the seams of drywall in a home in South Franklin Township that he and Joe Eldridge are remodeling to resell.
Rick Shrum/Observer-Reporter
Jamie Nicholls and Barry Crumrine have started their own real estate company, Park Place Realty Group, with broker Gina Berardinelli.
A pre-flip view shows the state of deterioration of the house at 611 S. Main St. in Washington a year ago.
Ayear ago, 611 South Main Street would have made many flippers flip – with disgust.
The house was beyond decay, almost beyond repair and virtually beyond belief. It had become a sorely neglected, crumbling structure like too many others in downtown Washington.
“No one wanted that property,” Dennis Locy said. “It went to tax sale in 2013.”
Actually, someone did want it – Locy. He bought the 114-year-old home for a minuscule $2,082 on June 28, 2013. Then he rolled up his sleeves for the long run.
An experienced house flipper from Prosperity, Locy toiled for eight months with co-worker Joe Eldridge. “That’s been our biggest project,” Locy said. “We had to do everything. We probably invested close to $180,000 on that property.”
The payoff was amazing, though, especially to anyone who had been in the former dump. Fourteen months after he bought the house, and began transforming it into a stately yellow two-story gem with white front porch, it was listed for $248,000 on Aug. 30.
A mere six days later, the property was under contract with a young couple, Clayton and Libby Dennis, for $235,000.
That was 113 times what Locy paid for the house, which more than covered construction costs.
Not all flippers can replicate that serendipitous set of circumstances, but the possibility of doing so is what entices many to an industry that is growing, at a time when the housing market is regaining its equilibrium.
There are challenges, of course. Starting up can be difficult, finances can be tight and housing demand can be fickle. Some buyers simply prefer a newly built home,
But the potential for prosperity is there, and so is the demand for flippers, particularly among consumers who prefer a refurbished older home in an established neighborhood.
A skillfully rebuilt home also can have the proverbial domino effect. At the risk of sounding like a Miller Lite ad … restored houses along South Main can lead to other neighborhood upgrades, leading to higher housing values, leading to a better city.
Thank you.
The neighborhood newbies appreciate the craftsmanship of Locy and Eldridge. “We’re super impressed with everything they’ve done,” Clayton Dennis said.
Some, but certainly not all, flippers work with a real estate agent, an arrangement that benefits both sides.
“One of my best clients does a significant amount of flipping,” said Tim Ulam of Coldwell Banker Real Estate Services, referring to Tom Manganas of Maxim Construction.
“I find him houses, he fixes them and I list,” said Ulam, who is based at the Peters Township office as half of an agent team with his wife, Sue.
Locy works with the Barry Crumrine/Jamie Nicholls team of Re/Max Community Real Estate, located in Washington Crown Center.
“Dennis is one of the best. He has a vision,” said Crumrine, a retired coal miner and current president of the Washington-Greene Association of Realtors.
Nicholls was impressed, almost to the point of disbelief, with what Locy wrought on South Main.
“We saw it after he first bought it,” she said. “We never thought he could do that. He took a sledgehammer.
“We’ve seen houses listed where there is a superficial cosmetic upgrade. Obviously, there’s more cost involved with starting over, but (a buyer) is basically getting a new home. You’re also improving a community where a house was going into demolition. It enhances the value of all homes.”
There certainly is no dearth of flippable homes, Ulam said.
“We’re looking for houses in need of a lot of work,” he said. “Some are bank-owned, some are by family estates, and some are just in bad condition. But the majority are estates and bank-owned.”
Ulam said most of the flipped homes he markets are in Washington County, along or near the Interstate 79 corridor: in Canonsburg, Houston, Washington and Peters, North Strabane, South Strabane and Chartiers townships.
“From my standpoint,” he said, “I have to evaluate how well that house will do after the work is done.”
The work Manganas has done this year has been formidable. This is the busiest he has been in three years as a flipper, transforming about 15 homes in 2014, most recently in Washington and Burgettstown.
This North Strabane resident is establishing a reputation.
“It’s getting to a point where if I find him a house, we have people making a contract before he’s finished,” Ulam said. “Customers who find he is working on a house may ask for it.”
Locy likewise is carving an identity with a business he operates with his girlfriend, Cydney Lowe. He has been flipping for six years, starting with a home on Ramsey Road in North Franklin Township.
That was the beginning of a personal – and risky – transition. Locy said he was a general manager of American Bridge Co. in Coraopolis when he decided to go on his own and flip.
The concepts were similar in both vocations, he said. “We built bridges and it was basically blueprints and tape measures and quality work. The housing industry was the same, except for moving from steel to lumber.”
Locy quickly realized that flipping is an institution of higher learning.
“It is not just labor,” he said. “You have to do a lot of investigative work. I’ve gone through so many struggles with surveys and liens. You have to do your research.”
It can be a costly endeavor, usually at the start. Locy said he thought he didn’t need the backing of a bank, “but I found it takes money to buy these properties. It took three years of being self-employed before banks worked with me to loan money.”
He survived those early struggles and gained a foothold. Locy’s handiwork is evident elsewhere in Washington County, including two other structures in North Franklin, plus Washington, West Bethlehem and Centerville. His most recent project was in South Strabane Township.
House flipping is not as prevalent in Greene County, said Melissa Kalsey, an agent for Coldwell Banker Baily Real Estate in Waynesburg.
“I have two or three clients who (flip),” she said, “but they have full-time jobs and do it on the side.”
The majority of flippers probably fit that profile more closely.
“It’s very difficult making a living doing that,” Ulam said. “Doing one or two a year, you can make a little money and it may be fulfilling in that sense. But to do this as a business and make a profit on every house is not an easy thing to do.”
Libby and Clayton Dennis are an American Dream couple: mid-20s, good looking, personable, upwardly mobile, with an adorable baby – year-old Evelyn.
Any community would embrace them. The southern end of Washington now is.
The Dennises moved there from Texas, where Clayton worked for Halliburton. a global oilfield services company. He was transferred to Southpointe, where he specializes in sales, in June.
They sold their Texas home quickly and lived in a Pittsburgh area hotel for nearly three months, while scouring the region for a new residence. They tried Beaver Falls, the North Hills, Mt. Lebanon and elsewhere before finding South Main.
This would be a shorter commute to work for Clayton, but that was not the only factor in their decision.
“What really drew us was this area was really growing and the taxes. You can’t beat that,” said Libby, a nurse now seeking employment. “You get so much more for your money.”
She and Clayton, who were both raised in Missouri, made their offer less than a week after the house was listed and Locy accepted. Libby said they weren’t the only interested clients, that “a couple of other people were coming for a second look.”
Locy, of course, is out to make money. He is a full-time flipper. Yet there are side benefits to this job – like satisfaction and pride – that he considers priceless.
“The most enjoyable part is the neighbors you meet and the joy on their faces over the work we do,” he said. “South Main was an eye-catcher for us. Everyone thought we were crazy at the beginning.”
Not now.