Many who tried to flip lower- and middle-class residences were stung by the housing market collapse with the rest of us, but Irvine flipper Nick Sinatra apparently believes the time is ripe again.
One difference: Sinatra does it his way with million-dollar properties.
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The Wall Street Journal Online had an interesting post about Sinatra's strategy in light of the private-equity firm Colony Capital LLC and the Pritzker/Vlock Family Office investing $50 million into his company American Coastal Properties LLC of Irvine. That's chump change for the investors, but it will allow American Coastal to double the number of homes it buys, renovates and sells annually, reports WSJ.
It also shows the money folks are less interested in the traditional route of buying distressed or foreclosed homes, sprucing them up and re-selling them. There is now apparently too much competition in that sector. But in California, there is a demand for expensive properties, and so follow flippers like Sinatra.
Flipping these pads takes money up front, because it is not like investors are picking them up on the cheap like they did with foreclosures or short sellers. It also takes an eye for fixer-uppers that dot exclusive neighborhoods along the coast. I know a couple I can point Sinatra to after having paddled a kayak through the Naples Island channels.
As Sinatra put it to WSJ, he's less in the home business than he is the property business.
“It's a land trade,” he reportedly . “We're essentially higher-end home builders in highly desirable neighborhoods that even in bad times don't suffer.”
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OC Weekly Editor-in-Chief Matt Coker has been engaging, enraging and entertaining readers of newspapers, magazines and websites for decades. He spent the first 13 years of his career in journalism at daily newspapers before “graduating” to OC Weekly in 1995 as the alternative newsweekly’s first calendar editor.