Single-family house flips offer the opportunity to get in and out of a deal quickly with a low minimum investment amount and the potential for high returns.
The goal of our flip investments is to quickly add as much value as possible to the property, then sell it immediately. This way, we can generate the highest annualized returns for our investors.
We complete extensive interior and exterior renovations of the main house. Then, to maximize the value of the property, we often build a brand new ADU (a small additional dwelling unit) next to the primary house. This effectively turns the single-family property into a property with two separate homes, instantly increasing the value substantially more than a traditional house flip project would.
We specialize in flipping distressed, low-end homes in up-and-coming areas. These types of properties often offer higher profit margins, more transformation potential, and greater buyer demand.
Single-family flips are our quickest projects, with timeframes ranging from just 6-12 months. This project type is ideal for investors who are looking for a short-term investment.
House Flip Transformations
Our ADU (Additional Dwelling Unit) strategy
Properties with ADUs have been growing in popularity, particularly in sprawling urban markets with a shortage of homes, like Los Angeles. To capitalize on this demand, part of Gatsby’s proven house flip strategy often includes building an ADU on the property. This is one of the ways we can add so much value to a property in such a quick timeframe.
By building a new structure on the property from the ground up, we create two separate housing units. Not only does this help combat the housing shortage in a particular market, but it also makes the property easier to sell.
Here is what investors need to know about our ADU strategy.
An ADU (Accessory Dwelling Unit) is an additional unit built on a single-family property next to the primary house. ADUs can also be called guest homes, in-law suites, or casitas.
Properties with an ADU are in high demand because homebuyers can use the ADU to house family members or guests, or even rent out the unit for passive income. The median rental rate of an ADU in California is $2,000 per month, but this can be as much as $4,000 per month in high-value markets like Los Angeles. This is attractive to any buyer who wants to help offset their mortgage cost with passive rental income.
In a single-family flip, investors buy both the house and the lot. By building a second unit on the same lot, we basically get another house with “free” land. This maximizes the property value while increasing buyer demand because of the options they offer.
Homes with ADUs are in demand by the following groups:
- Buyers who want to live in one unit and offset part of their mortgage payment with passive income from the rental of the ADU.
- Parents of young adults who want a separate living unit for their grown children.
- Multi-generational households with aging parents who still want some independence.
- Buyers who are new to the area and want to keep a guest house ready for their out-of-town visitors.
- Private investors who understand that they can get multiple streams of income as well as impressive appreciation on this type of residential property.
Placing and Tracking an Investment
All investment opportunities are offered directly on the website under the tab “Invest” when clicking “View All Investments.”
You can click on an investment project to view detailed information about each specific deal, including the property address, financial breakdown, estimated timeframe, investment strategy, area comps, and photos of the property. There is also an ROI calculator feature available for each project, which states the minimum and maximum investment available. You can enter an amount in this calculator to find your estimated target share in the property and estimated return.
Placing an investment is easy! You will be guided step-by-step to finalize your investment request on the website. When your investment has been placed, you will be given the wire transfer and ACH instructions. You will then have five business days to send the funds and secure your place in the investment.
Once the investment is active, you can track your investment from start to finish through the user-friendly online dashboard. You’ll be able to see the project’s progress bar as well as progress photos of the renovation and ADU construction. We also send email updates when the project moves from one status to another.
When a project is completed and sold, you will receive your disbursements via wire transfer. After receiving the funds, you can enjoy your proceeds or look for new investment opportunities to continue to grow!