Real estate has historically been one of the most reliable and profitable investments available. Unfortunately, it’s also been one of the most difficult investment markets to break into. Long-term timeframes, high upfront capital requirements, and specialized knowledge have prevented the average investor from taking advantage of the many benefits of real estate ownership.
Real estate syndication companies have removed some of these barriers, making high-yield property investments available to the everyday investor. Syndication companies pool funds from multiple investors to finance a single real estate project. This allows investors to buy into a deal with a fraction of the upfront capital that would be needed to finance a property alone. And because the deals are vetted by the syndicators, investors are able to invest without the extensive local market knowledge and legwork typically required of successful real estate investors.
However, time frames still present a barrier for short-term real estate investors. Most syndication companies specialize in long-term commercial real estate investments of five to 10 years or more. Gatsby Investment is changing the landscape by offering short-term real estate investments with high yield potential for investors who want to maximize their returns without tying up their funds for several years.
Fix-and-flips are a classic short-term real estate investment. Investors can purchase a property, rehab it, and sell it at a profit in a matter of months. But the fix-and-flip process is time-intensive for individual investors; there’s a lot of hands-on work required from selecting the right property, getting the appropriate permits, working with contractors to plan and execute the renovation, and then finding a buyer. And the margins can be razor-thin if the renovation expenses are higher than anticipated or the after-renovation value is lower than projected.
These issues are all addressed by Gatsby’s single-family flip model. Investors can choose from expertly analyzed flip opportunities with an average timeframe of just six to 12 months and a minimum investment amount of as little as $10,000. Gatsby handles the entire acquisition process, as well as the renovation and building process, followed by the successful sale of the property when the renovation is complete.
The secret to Gatsby’s success in single-family flips is its strong niche in the Los Angeles market and a laser focus on properties that meet a specific set of criteria. To be considered as a Gatsby investment offering, single-family flips must meet strict standards for generating as much profit as possible, including a high transformation potential, the ability to accommodate an accessory dwelling unit (ADU), a below-market purchase price, and a high after-renovation value.
This investment model allows investors to grow their money short-term by getting in and out of a deal quickly, while still maximizing their profitability potential.
Gatsby’s multifamily developments prioritize ground-up construction of small multifamily structures of 10 units or fewer. By focusing on projects with fewer units, Gatsby is able to secure the necessary building permits faster and reduce construction times to serve short-term investors. And because smaller buildings are in higher demand by investor-buyers, the completed project can be sold more quickly. On average, a multifamily development takes 18 to 24 months from the initial purchase through to the final sale.
As with single-family flips, Gatsby has a special formula for maximizing the return potential of multifamily developments. It starts with the lot. Gatsby focuses on single-family lots that can be converted to multifamily use due to recent zoning law changes in California. This allows Gatsby to acquire land in Los Angeles for less than the cost of a comparable commercially-zoned lot. Then Gatsby works with award-winning architects to design floorplans with three to five bedrooms. This layout meets the increasing demand from growing families who have been priced out of the housing market, as well as co-living renters who are opting to live with multiple roommates to make rent more affordable.
Through this formula, Gatsby maximizes the value added to a lot, giving investors the potential for an above-average yield in a short timeframe.
How Gatsby Syndication Compares to Other Short-Term Real Estate Investments
Before Gatsby introduced their short-term investment opportunities, investors who wanted short-term options in real estate were limited to securities like REITs (Real Estate Investment Trusts) or real estate-based ETFs (exchange-traded funds) and mutual funds. The problem with each of these financial instruments is that they provide very little control to investors. REITs, ETFs, and mutual funds all represent investments in real estate companies that have a portfolio of properties and can acquire or dispose of assets at will, without investor approval. This means that investors have no input in which properties they invest in.
Gatsby, however, offers investments on a deal-by-deal basis; Gatsby investors browse through the list of the company’s open investment opportunities and pick the exact properties that meet their goals and specifications.
For investors, the Gatsby Model makes real estate investing as simple as investing in the stock market; you set your personal criteria for the kind of returns and risk level you’re looking for and pick a project that fits those criteria. All of the active work involved in the deal is managed by Gatsby. And your returns are completely passive.
If you’re interested in a passive real estate investment approach that offers the benefits of traditional real estate investing while maintaining the flexibility and liquidity of stock market-based securities, consider one of the short-term investment opportunities presented by Gatsby Investment.
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