Eric Layne has always admired houses. He drew them as a child, constructed them while in college, and spent a “ton of time” reading books and taking classes on real estate. Layne even had his eye on becoming an architect. But his path led elsewhere.
In 2008, in the depths of the housing bust, he borrowed $50,000 from his family and invested $32,000 in a Hidden Valley house. Layne put $14,000 into renovations and sold the house for $68,000.
Since then, he’s flipped more than 40 houses. The broker, investor and distressed-property maven has moved on to Myers Park, where he paid $585,000 in cash for a 1940s-era Cape Cod he later tore down. In its place – a 4,400-square-foot house he’ll market for well over $1 million.
“I’m able to see a lot of potential in a house that other people can’t see,” Layne said. “They can’t get past the pink shag carpet and avocado kitchen. I act as my own interior designer by choosing all the finishes and as my own architect in terms of re-laying out the interior and exterior space.”
Only the foundation serves as a reminder of the 2,600-square-foot house that once stood at 2308 Vernon Drive. Layne opted to gut the site because Cape Cod-style floor plans are notoriously difficult to sell as they don’t have a master suite.
“It was faster and more cost-efficient to tear down and build new instead of taking off the second story,” he said. “Speed is everything. I can’t make money if I sit on one project for too long.”
Construction at the .53-acre lot began in September. The new house, being built in a partnership with Silva Custom Homes, will be faced with natural stone. It will feature energy-efficient windows and insulation, 10-foot-high ceilings, heavy trim and a tankless water heater. Granite countertops and hardwood floors will be installed.
The house will be ideal for a growing family, Layne said, because it will have five bedrooms, a study, a basement and a bonus room. A covered porch, dubbed exterior living space, will allow buyers to warm themselves by the fireplace or watch television outside. A two-car detached garage will include additional optional space to set up a mother-in-law suite. The house is slated for completion early next year.
Layne, 37, began his real estate career six years ago, working in short sales and bank-owned properties. He bought and sold houses for local and international investors.
That led to his Certified Distressed Property Expert designation. He’s a real estate agent for Helen Adams Realty, where he’s worked for the last four years, and owns a private-investment firm, Genero Properties.
Layne said he hasn’t encountered any problems with his most recent project.
His advice for anyone toying with the idea of entering the market: How do you eat an elephant? In small bites. He said it’s important not to overextend financially. Spending $1 million in a $500,000 neighborhood, he said, will lead to a break in conformity, meaning that maximum value won’t be realized because a reasonable degree of similarity with other properties in the area will be lacking.
“Start small and invest in your team,” he said. “Contractors, attorneys and inspectors are the most important attribute in the flipping business.”
Project description: Tear-down and building of house in Myers Park
Address: 2308 Vernon Drive
Architect: Century Designs Inc.
Contractor: Silva Custom Homes
Space: 4,400 square feet
Cost: Permit pulled for $440,000, but costs may run higher
Construction started: September
Construction completed: Early 2015