When people think of fix and flip houses they often think of homes that are turned around to meet the bare minimum of appeal – budget fixtures, features, and finishes, designed to attract attention from buyers without blowing the whole renovation loan budget on fancy extras.
Most fix and flip projects are a step above that, with professionals using their funds from a direct lender to make the most of a home by selecting high-quality but inexpensive features. Still, there are people out there looking for high-end homes, and more and more fix and flip projects are filling in that blank!
Going luxury for a fix and flip means you will be marketing toward a niche population, but with the benefit of increased profit margins if you are successful. It is a bit more of a gamble at the beginning, as you will have to spend more money at the outset to outfit a luxury home. It is important to ensure you have the money and the budget to support this kind of project, so talk to your direct lender about what kind of renovation loan will work best for you.
Selecting luxury options for a fix and flip means the final project should be move-in ready for people with discerning tastes. Do not be afraid to spend your money, because you will need to do so in order to get the best returns!
It may be harder to find the right neighborhood for a luxury fix and flip, as you do not want to make the home so valuable that it won’t fit in with other nearby homes. Talk to a realtor or other real estate service about finding a home in a luxurious neighborhood, that is in need of extra help from a fix and flip expert. People who want to buy luxury homes want to live in nice neighborhoods, so this step is an important part of the process.
Going luxury is not for everyone, so if you are averse to risk, you may want to stick with more traditional fix and flip projects. But for those willing to take a gamble, the profits will be quite reassuring. The higher risk usually comes with a higher reward, which can give you the confidence to keep going forward with luxury fix and flip homes after attaining initial success. Talk to your direct lender about funding a luxury flip!
For more information about fix and flip strategies, please contact us. As hard money lenders with years of experience, we can help you find the tools for successful investing today.
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