Founder Mila Zelkha, Mint Condition Homes, and two of the properties.
As the Bay Area housing market heats up, competition between investors looking to buy cheap and re-sell - or “flip” - properties is increasing: A boon to sellers, but a challenge for investors like Mint Condition Homes owner Mila Zelkha.
Mint Condition has been rehabilitating blighted properties in Oakland for several years. With green sensibilities and a loyalty to building era, the urban redevelopment firm is working to revolutionize the "flip" marketplace, one house at a time.
While the company continues to receive recognition - the Oakland Heritage Alliance recently awarded the firm a Partners in Preservation Award for the third year running - the changing market is driving Zelkha to pursue new enterprises.
“Although my projects have been steady, I’ve been focusing on doing construction renovation work for outside projects because I don’t want to just get caught up buying a house to work on if it’s not the right price,” she said. “You have to be really careful that you’re not overpaying.”
Zelkha’s wariness is warranted: Historically low interest rates and rising rental costs are pushing Bay Area residents towards home ownership. And with few properties on the market, competition is driving prices up.
“I see a lot more buyers have entered,” Zelkha said. "I’ve come across multiple offers on my listings. Modest multiple offers that are a really good sign that people are in the market."
But the flip side is that she faces stiff competition from other investors eyeing fixer-uppers they can renovate and re-sell.
To meet the challenge, Zelkha obtained her contractors license at the end of last year and turned Mint Condition Homes’ construction crew into an independent business: Wrecking Belle Inc. The residential construction company focuses on rehabilitation, restoration and green design practices and will enable Zelkha, she said, to keep her crew working even if Mint Condition Homes takes on fewer projects.
“I’m really proud that everything is above board,” she said. “I’m proud to have a viable business that serves the community and allows the families of those who work for the company to thrive as well.”
For Zelkha, paying workers a living wage is central to the green design approach; so is working with local vendors and subcontractors. As she describes it, green design takes a holistic view of the development process. By gathering all subcontractors at the start of a venture to plan a coordinated effort, green design practice aims to avoid the atomized structure of traditional construction projects.
Deconstruction work is done carefully, with an emphasis on salvaging and recycling materials; Zelkha’s team then updates the homes’ electrical and plumbing. They work to improve overall energy efficiency by insulating homes and selecting high-efficiency appliances and water-saving toilets and faucets.
Green design also involves green material choices.
“We try to avoid putting in new carpeting because it has a very limited life span and ends up in landfill,” Zelkha said. The team also uses low or no VOC - volatile organic compounds - paints when possible.
“We really believe in creating a thriving Oakland community,” she said. “It’s hard for homes to appraise with low value homes around them.”
In the Maxwell Park neighborhood, where Zelkha has revamped several homes, neighbors say they are pleased.
“They solved many long-term problems with the house,” said Janet Moore, whose block saw a renovation by Zelkha. “I think MCH did a great job. I like the way our small row of 1925-26 houses look now. There is a coherence, but individuality.”
Helen da Silva, another Maxwell Park resident and local Realtor, said the MCH renovations have attracted “good neighbors” and improved the neighborhood.
“She does it differently,” da Silva said. “A lot of what has been going on is these investors just come in and buy up a house and do a ‘flip’ on it with little thought to green materials; or do something that doesn’t quite fit with the architecture.”
Farrah Wilder has been working in Bay Area real estate for five years and said Zelkha is one of the few investors committed to thorough and responsible renovation.
“We’ve seen flippers that whole time and Mila is unique because she really tries to do a good job in a healthy green way,” the Pacific Union Realtor (who has occasionally written for OL) said. “A lot of flippers aren’t willing to do real structural repairs, they just make it look nice.”
Zelkha’s advice to those in the market for a renovated home is to be fastidious about permits.
“It’s important that you have your real estate agent ask for the permit history of the house,” she said. “Just because you’ve done a home inspection doesn’t mean there aren’t surprises; it’s really important to do a little more homework on the history of the house. You can do that without alarming the seller. Have your agent ask to see the permit history.”
And for those seeking a fixer-upper, her suggestion is to be patient and learn the market.
“If people are thinking about getting a fixer they should really spend a few months getting to know the market in the neighborhood to make sure they’re not paying a lot more because they’re competing against investors,” she said.