The great thing about real estate investments is there are so many options to choose from. One of the most popular options (certainly if you’re going by the number of HGTV shows) is fix and flip in real estate.
This approach, centered around purchasing properties, enhancing their value through renovations, and reselling them at a higher price, has the potential for lucrative profits.
But the current economic climate it presents a series of challenges, most notably the escalating costs associated with building and renovation.
These rising expenses mostly due to the rising interest rates are reshaping the profitability and feasibility of this strategy, prompting investors to seek more resilient and adaptable investment avenues than fix and flip in real estate.
Let’s Start Investing
Is fix and flip in real estate still the ‘golden goose’ of profit?
What if there was a simpler alternative to fix and flip investments?
Especially one that was less management-centric and not directly dependent on building costs and oversight.
With a sterling track record and deep-rooted expertise in the sector, Marquee Funding Group offers just such an option—tailored to meet the needs of both novice and seasoned investors.
Let’s look at the intricacies of the ‘fix and flip’ model, evaluate the implications of soaring building costs, and introduce you to the innovative investment solutions provided by Marquee Funding Group.
The challenges of ‘fix and flip’ investments
The ‘fix and flip‘ model is a traditionally popular real estate investment strategy wherein an investor purchases a property, renovates or remodels it, and then sells it for a profit.
Upfront costs of fix and flip in real estate
- The purchase price of the property
- Renovation costs
- Financing expenses
- Various holding costs such as property taxes and insurance
However, the very nature of renovations is unpredictable and can easily lead to cost overruns and delays, impacting the overall profitability of the project.
The time required to sell the property can vary but is usually within a short period, typically around 12 months, to avoid additional holding costs and interest expenses.
Rising building costs
Building costs have risen significantly in recent years.
Consider these recent statistics on building materials:
- The cost of materials for building a single-family home increased by 45% between 2018 and 2022, with a surge of 35% since the start of the pandemic.
- About 82.5% of construction materials experienced a significant cost rise since 2020, with an average jump of 19%.
- The U.S. Construction Cost Index forecasts a 14.1% year-over-year increase in construction costs.
How increasing construction costs affect investor returns
Regardless of the type of construction project you’re thinking of starting, rising building costs can significantly impact:
- Profit margins
- Timeframes
- Investor risk
These potential impacts make it essential for investors to accurately estimate and manage renovation costs.
Higher building costs can also extend the renovation timeline, leading to increased holding costs and potential market risks.
This underscores the critical importance of thorough due diligence and accurate financial analysis before undertaking any fix-and-flip project.
An introduction to Marquee Capital Fund 1
Recognizing the challenges inherent in traditional real estate investments, Marquee Funding Group offers a robust alternative through its private investment fund.
Marquee Funding Group provides investors with an opportunity to take part in the sector’s potential rewards without the direct complexities and risks associated with property flipping.
How the fund works
The Marquee Capital Fund 1 operates on the principles of diversification and professional management.
By pooling resources and investing in a variety of real estate projects, the fund mitigates individual investment risks and offers a more stable and predictable return profile.
Investors benefit from the honed expertise of professionals who oversee the selection, management, and optimization of investments, ensuring that each project aligns with the fund’s strategic objectives and risk management framework.
Benefits of alternative investments over fix and flips in real estate
Investing in Marquee’s fund introduces a paradigm shift in maximizing returns from the traditional investing approach, primarily in terms:
- Better risk management
- Greater potential returns
- Less effort on the investor’s part
The dark side of direct project management of fix and flip in real estate
Direct investment in individual properties demands:
- Extensive market knowledge
- Renovation management
- Much more risk tolerance
The Marquee Capital Fund 1, on the other hand, offers a diversified portfolio managed by seasoned professionals.
This diversification inherently spreads risk across multiple projects, shielding investors from the volatility tied to any single property.
Moreover, while ‘fix and flip’ investments can provide substantial returns, they also require significant hands-on involvement and bear the brunt of market unpredictability and rising costs.
The Marquee difference
The Marquee Capital Fund 1 is designed to optimize returns through strategic asset allocation and professional oversight, ensuring each investment is poised to capitalize on market opportunities while mitigating risks.
One of the fundamental tenets of investing with Marquee Funding Group is that they must pay a minimum of 90% of their taxable income to their shareholders in the form of dividends.
Compared to the potential headaches and risk of standard fix and flip in real estate models, it’s no wonder there’s great interest here.
Marquee Funding Group also upholds a reputation of honesty and integrity, as well as expertise and experience in the private real estate sector.
Navigating investments with Marquee Funding Group
Investing with Marquee is a streamlined process—designed to cater to both seasoned investors and newcomers to the real estate market.
The first step is the easiest
The initial step involves reaching out to Marquee’s team, who are committed to understanding your investment goals and guiding you through the available options.
Marquee Funding Group prides itself on offering personalized service, ensuring that every investor receives the attention and expertise necessary to make informed decisions.
From the onset, investors are equipped with comprehensive resources and continuous support, reflecting Marquee’s dedication to fostering long-term, successful investment partnerships.
How to invest without fix and flips in real estate
In the face of rising building costs and the inherent challenges of traditional ‘fix and flip’ real estate investments, it’s easy to see why investors might consider Marquee Funding Group’s Capital Fund 1 as a compelling alternative.
For investors poised to redefine their real estate investment strategies, Marquee Funding Group stands ready to guide the way.
Embrace the opportunity to diversify your portfolio, mitigate risks, and achieve your investment goals with Marquee’s expertise and support.
Reach out today to explore how Marquee Funding Group can maximize and protect your returns against the shifting tides of real estate.
