We had the good fortune of connecting with Gina Michelle and we’ve shared our conversation below.
Hi Gina, if you had a million dollars to invest right now, how would you use that capital?
If I had a million dollars to invest, I would invest it in buying property in Los Angeles and adding ADU’s. The last 2 years the City of Los Angeles has made it extremely easy to add accessory dwelling units (ADU’S) to pretty much any single-family residence. They have removed requirements for garages and carports so that you no longer have to have on-site parking. The previous rule was that the combined square footage for housing on the property could not exceed 45% of the lot size. Changing these rules has made it that a permitted ADU can be added very easily. Certain lots even support three structures on the property, one main house, an ADU up to 1200 square feet, and an additional smaller ADU up to 500 square feet. Typically, Los Angeles is not a cash flow state, meaning investors that buy investment properties generally have a difficult time creating cash flow unless they have a large sum of money down on the property. The rents usually do not cover the carrying costs of our real estate because it’s more expensive than most other states. Investors that buy in Los Angeles typically buy for long term equity growth. Now, with these changes, it has allowed investors to build and create decent cash flow and a CAP rate while they own Los Angeles real estate. The process looks something like this: Purchase a debilitated/fixer property Renovate first house, expand square footage to a 3 bedroom / 2 bathroom Build a 1200 square foot, 2 story, 3 bed /2 bath ADU on same lot Put a fence down the middle….and viola… you have created cash flow and cap rate! CASE STUDY: Check out a case study I completed and designed with my partners @PriceLift. This one was a major value add and located in a fantastic Hancock Park neighborhood. Let’s Talk Numbers: Pick up Price: $935,000 Added 500 square feet and fully renovated the main house Built a 1000 square foot ADU (Accessory Dwelling Unit) Total Renovation Build Cost: $380,000 Sold in 1 Week Over asking price with multiple offers for $1,880,000 Added $945,000 in value Let’s Cap Rate The investor who bought this project rented out both houses The front house leased for $5900 The backhouse leased for $3600 The Cap Rate after-resale =4.7% The As Developed Cap Rate = 6.7% Boom!
Alright, so let’s move onto what keeps you busy professionally?
I started my real estate career right out of college when I was 22. Initially, I started investing in rental property out of state but ended up getting my broker’s license to facilitate my own deals. I was running a very large loan office and, in the course, this position acted as the conduit which morphed my focus into traditional real estate. As the market turned around after the 2008 crash, I started representing builders and developers. I became very interested in the design portion of luxury real estate. Thus, my company, ” The Gina Michelle Project” was born. I partnered exclusively with a company called PriceLift. Our PriceLift model was designed to bring renovation and selling in a ‘one-stop, no upfront cost’ package to the homeowner. When a client utilizes the PriceLift model, PriceLift will pay for and manage all the construction so the homeowner doesn’t have to. I design the finishes and stage the property before selling. This allows the regular homeowner to capitalize on the market, and sell a property like an investor or developer would, without investing a dollar upfront. In 2018 I made the decision to join the ranks with some of the best luxury agents in the business at The Agency. I believe that in order to grow and maximize any business, your best step is to surround yourself with the brightest, most accomplished people in that business, those who are essentially masters of their craft. While I went from running and operating my own Brokerage to being a team head within another one, I stepped into an elite agency with a brand that I believe is one of the best in the world. We are a marketing and event-driven real estate firm, particularly focused on the luxury client. I am most proud of being a team head of some extraordinary women at The Agency. I love to teach, and when the women on my team succeed, there isn’t a better feeling than knowing that I helped them achieve their success. The biggest challenges have always taught me the greatest lessons. This is a hard business that on the surface may appear simple, but it takes an extraordinary amount of consistent effort, positive attitude, actions, work-life balance as a mom and wife. Two years ago, just when it seemed my career had hit a peak, out of the blue my 3-year-old daughter was diagnosed with a rare seizure disorder. Once my daughter became sick, I entered a new playing field entirely. I was now working full time running my business, a wife, and mom of 2 tiny humans that need me, one of which is a special needs child. So I definitely always feel like I am juggling ten balls at once – but I love my life!
Who else deserves some credit and recognition?
The biggest thanks would have to go to my husband, who is also my business partner for the past 15 years since I started Real Estate. Together, we worked and learned the business side by side and YES, we still actually like each other! In addition, I have a rock-solid family that provides me with a continual and strong support system. My team, I believe, is one of the most efficient and fun real estate teams around, and much of that is to do with my right-hand Marcia. I am also a special needs mom and my children and particularly my special needs child, keep me grounded, humble and grateful for each day and every smile.
Other: http://theginamichelleproject.com/ https://youtu.be/435XvRfBeFE
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