Raze or Remodel? In North Hollywood, California
For builders in an urban or suburban area, it’s nearly impossible to find unfettered, open land to build on from the ground up, So, most are forced to tear down, if a client is looking for a new home, or the builder is looking to create a for-profit spec home.
Sometimes new home builds have an appeal that older homes just can’t match: less maintenance, better insulation, the latest in connected home technology.
Older homes have charm, character, and typically a price point that can’t be matched.
At Raze Or Remodel, you decide if the house is a tear down, or a remodel.
Based on the home information and comps provided below, would you tear it down and build new, or remodel?
Our thoughts are at the very bottom.
Would You Raze Or Remodel This House?
Address:
7045 Wortser Ave
North Hollywood, CA 91605
Asking Sale Price: $691,510
Type: Single Family
Year built: 1956
HVAC: Forced air heat and central air conditioning
Type: 4 Bedroom / 2 Bathroom Single Family
Size: 1931 Square Feet
Lot Size: 8618 Square Feet
Taxes: $6,919
Since it’s a foreclosure there aren’t many pictures of the interior floating around, but here’s the exterior on Google Maps and a map of the location.
Check the comps below we listed to help formulate your answer.
The lot size seems to be a good 20-25% larger than most other recently sold homes.
Most other homes sold at this price point have been 2 or 3 bedroom homes.
Neighborhood Comps
Comp #1
7042 Ethel Ave, North Hollywood, CA 91605
Price: $1,099,888
Rooms: 7 beds / 5 baths
Size: 3,159 Square Feet
Lot Size: 10,018 acres
Year Built: 2013 & 2018
Remodeled: Not since they were built
HOA: No
*This property is two homes on one lot for a combined 7 bedrooms and 5 baths
Comp #2
7514 Bellingham Ave, North Hollywood, CA 91605
Price: $655,000
Rooms: 4 beds / 3 baths
Interior Size: 1,987 sq ft
Lot Size: 3,610 sq ft
Year Built: 1989
Remodeled: No
HOA: Yes
Comp #3
7758 Tujunga Ave, North Hollywood, CA 91605
Price: $910,000
Rooms: 6 beds / 4 baths
Interior Size: 2,296 sq ft
Lot Size: 6,336 sq ft
Year Built: 1944
Remodeled: Yes
HOA: No
Our choice: Remodel
There are a few factors we considered before choosing to remodel:
Price - Even if we could get the home for $25,000 less, the price point likely won’t yield a cash positive outcome if we decided to knock down, and build from the ground up. Even at a cost of $200 per square foot, we’d like to develop a 3,000 square foot home. At an additional cost of $600,000, we’d be over shooting the market for the location.
Add On - We’d like to add on to the existing structure and remodel a good deal of the fixtures inside the home. Adding 1000 square feet, and possibly a second floor. We could easily turn this house in to a 6 bedroom / 3+ bath house.
Approximate renovation cost: $300,000
Total Cost for house + renovation $991,000
Post Renovation Value: $1.0 million
If we renovate we likely break even, but if we tear down, we’re likely to be under water by $300,000 or so. With the rising real estate prices in the LA area (7% year over year in some areas), you could argue a case either way.