fbr investment fund House Flip investments
If you’re looking for a solid, high-return investment opportunity then our single-family residential Investment Fund is perfect for you. With a low minimum investment amount and the potential for impressive returns, this is your chance to capitalize on the dynamic real estate market with an experienced investment company.
The goal of our with house flips is simple: purchase properties at a deep discount to the market (65% to 75% of FMV), quickly add substantial value to the property through strategic, quality upgrades and sell it on the retail market for maximum profit.
To increase investor returns we also implement the following “3-step, 1-month flip strategy” to quickly turn a property in approximately 30 days (and sometimes much quicker):
1. We buy our properties at 60-65% of FMV, closing quick with a combination of Fund cash and a Hard Money loan,
2. Our trades do a few weeks of the “hard” renovation work to get the property to a point where “any investor can perform the remodel”. By reaching this stage we have a large buying audience and get top dollar in step # 3……
3. Properties are then resold with a 1-week escrow to a cash investor as an “easy paint and carpet remodel” at 80% LTV.
While there are “profits left on the table” for the next investor, these quick turns have three very big advantages:
a. This strategy takes the retail buyer (and associated 45-day closing with risk of an Escrow Cancellation) out of the investment equation.
b. Quicker returns equal a higher Annualized IRR for our investors.
c. Being in a property for a matter of weeks significantly decreases market exposure risk.
Overall, we find this “speed approach” to investing to be very favorable and use this approach in any kind of slow/sideways market.
Additionally, if the market experiences a downturn we always have a backup plan to hold the property as a positive cash flowing rental, selling at the right time when market conditions are favorable and Buyer demand is strong.
We also have one more strategy in our tool belt. While 85-90% of our deals are “paint and carpet remodels” which do not require construction permits for renovation, we do go beyond traditional flips by creating permitted additions on the main house, or by constructing a brand-new structure adjacent to it. This is called an ADU (Additional Dwelling Unit). This innovative approach instantly transforms the property into a two-home investment, significantly increasing its value.
As you can see, at FBR Investment Fund we use our successful house flipping experience to generate strong returns for our investors while simultaneously mitigating risk. We have flipped over 375 single-family houses in the Greater Phoenix market since 2004 and we are continuing our investments throughout the Phoenix Valley in 2023 and 2024 – buying 15 to 20 houses a month. We purchase properties at all price points, but like to stay in the range where there is the strongest buyer demand.
Time is of the essence with our single-family flips, as these projects typically range from just 4 – 5 months for retail flips on the open market and ~ 30 days for our “1-month flip strategy”. If you are interested in investing, please drop us a note and we will get back to you. It’s an ideal investment option for those seeking short-term returns and a diversified portfolio.
benefits of single family house flip deals
Strong Investment Returns.
These projects yield some of our highest returns because of our discounted purchase price and quick return of profits. With a complete team managing the purchase and renovation process we utilize efficient systems to keep high profit margins.
Diversified Portfolio.
When you invest with us, you invest in a small Fund Pool with other investors. The Fund monies are used to purchase a number of different homes, with the group of homes balancing out risk amongst the properties.
Small Investment Size.
Start your investment journey with as little as $50,000. We believe in accessibility and want to offer opportunities to a wide range of investors.
The fbr add a structure / adu strategy
Enhancing property value and meeting housing demands are at the core of FBR Investment Fund’s successful house flipping strategy. As part of our approach, we incorporate the building additional structures – called ADUs, or ‘Accessory Dwelling Units’, whenever the opportunity presents itself. This strategy enables us to create two separate housing units, addressing the housing shortage and making the property more appealing to buyers. This strategy also allows us to charge more rent in the event that we hold the property during a market downturn.
Understanding ADUs: Also known as guest homes, in-law suites, or casitas, these are additional units built on single-family properties next to the primary house. These units have gained significant popularity due to local zoning changes that allow homeowners to build them, alleviating the housing shortages in highly congested areas.
Why ADUs are in high demand: Homes with ADUs attract various types of buyers who appreciate the flexibility and income potential they offer. These units can be used to generate passive rental income, accommodate family members or guests, or serve as a separate living space for multi-generational households. Additionally, buyers new to the area can benefit from having a guest house available for out-of-town visitors. Institutional investors recognize the multiple income streams and impressive appreciation potential associated with this type of residential property.
Maximizing Property Value: When investing in a single-family flip, you not only acquire the house but also the lot. By constructing an additional unit on the same lot, we effectively gain another house without the cost of additional land. This not only maximizes the property’s value but also increases buyer demand due to the added options and income potential. In high-value markets like Phoenix, the median rental rate for an ADU can reach up to $2,000 per month, providing attractive returns.
The Investment Process
Optimal Property Choice: Our experienced analysts meticulously evaluate numerous factors when selecting a property, including purchase price, transformation potential, and the ability to accommodate an ADU. Through our extensive industry connections, we secure deals that individual investors may not have access to. Our network of local brokers, other local investors who have off-market properties, foreclosures, probate courts, and auctions allow us to target high-profitability opportunities that meet our rigorous standards.
In-Depth Due Diligence: To mitigate risk and ensure optimal returns, we conduct a comprehensive due diligence process. This includes evaluating the neighborhood, comparing market values, reviewing rental income and vacancy rates, researching zoning codes for construction possibilities, projecting transformation potential, and estimating costs and expected return on investment.
Property Purchase: Once our offer on a property is accepted, our experts complete the final round of due diligence to ensure a clear title, permit availability, and structural integrity. We establish an entity to hold the property, secure necessary financing, complete all title and escrow documents, and successfully close the deal.
Existing House Rehab: FBR Investment Fund manages the renovation process from start to finish, covering all aspects of construction, including permitting, building, electrical work, plumbing, and roofing. Our skilled professionals work with award-winning architects to create custom designs and color combinations. Extensive interior and exterior renovations are undertaken, often involving a complete transformation to create a brand-new home. We optimize the layout for practical living spaces and enhance the landscaping and hardscaping.
ADU Design & Construction: FBR Investment Fund takes a unique approach to ADU construction, tailoring the design to each specific lot. Our collaboration with architects ensures that the ADU’s style aligns with the existing home, maximizing the available living space based on lot layout and size. Separate metering of gas and electricity allows for independent usage of the ADU as a rental unit. We submit the design plans for permitting, and while awaiting approval, we focus on renovating the primary house. This streamlined process allows us to complete builds efficiently, benefiting from favorable labor and material costs due to our volume of projects.
Updating Investors and Typical Project Time frame: We keep investors informed through our online Project Management software which includes regular updates with progress photos of the renovation and construction. On average, FBR Investment Fund’s fix-and-flip projects without an ADU take 4 to 6 months, and those with an ADU can take 8 to 12 months – depending upon the city in which they are located. We manage the entire process, from property acquisition to design, renovation, advertising, and sale.
Ready to Get Started? Begin your investment journey by reaching out to us for more information. We are excited to help you explore the opportunities FBR Investment Fund offers.