Gatsby’s real estate investment strategies for 2023
With rising interest rates, high inflation, stock market volatility, and uncertainties in the real estate market, we want to give you some insight into what our focus for the upcoming year will be, and explain how Gatsby’s property types continue to perform exceptionally well despite cooling market conditions.
Gatsby follows market trends closely, and our focus in 2023 will be on two specific short-term investment types:
- Single-family house flips and
- Multi-family new developments.
Both types will be built-to-sell, with time frames ranging from 6 to 24 months. This gives you a chance to grow your money while hedging against inflation, without tying up your money for a long period of time.
Here is a closer look at how each of these investment types works with the changing market conditions of 2023.
Gatsby’s house flips have a unique value-add proposition. Not only do we complete a full remodel of the main house, but we also build a brand new ADU on the property. This separate housing unit can provide future buyers with a residence for guests, aging parents, adult children, or as an on-site rental unit to generate passive income. Properties with ADUs are in exceptionally high demand because of the options they give buyers.
Additionally, Gatsby focuses on entry-level properties with affordable price points. Affordable homes are the most in-demand properties in Los Angeles. Therefore, even if property values are in a temporary state of decline, these in-demand properties are most likely to hold their value.
This strategy for meeting the high demand for affordable single-family homes with ADUs continues to make Gatsby’s flip projects incredibly successful. Most of our completed properties in the past year sold in under 30 days for more than the asking price!
Gatsby also has a unique strategy for developing multi-family properties. It starts with recent changes to zoning laws that were enacted to address the housing shortage in Los Angeles.
Southern California now allows certain single-family lots to be converted into multi-family developments to create more housing in central areas where it is needed most. This means we can purchase a single-family home, tear it down, then build a multi-family property on the lot. By turning a single-family home into a multi-family development of 4-10 units, we are able to maximize the return potential to our investors!
Another benefit of multi-family developments is that the sales price is based on rental income, which means multi-family listings are not as reliant on market conditions as single-family homes. Even if home values are dipping, rental prices generally remain steady (or may even increase). And buyers will look at these rental rates to determine the value of the property.
By tailoring our investment strategies to match buyer demand and capitalize on local legislative changes, Gatsby is able to consistently outperform the market!
To learn more about our investment opportunities, please contact us to schedule a call with one of our knowledgeable investment specialists.
We look forward to serving you in a prosperous 2023!