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House flipping gets an expensive twist

Luxury-home flipping is heating up in affluent neighborhoods as well-heeled builders and investors seek better returns than they get on other investments.

November 23, 2012|By Lauren Beale, Los Angeles Times

Among other projects, Brown re-stained the floors, put in a new kitchen, bathrooms and gas lines and took out a bedroom to create a master closet. Skimping was not an option.

"In a luxury flip, you have to buy the right materials," Brown said. "I've put a pretty penny into it."

No matter a home's vintage, well-heeled buyers want convenience and the latest features. Flippers can't just pick out granite for the counters, add a stainless-steel refrigerator and try to hide flaws with paint.

Elevators are in high demand in big houses, as are land, privacy and views. Must-have amenities include dual bathrooms off the master bedroom, spa tubs and showers with rain heads and multiple body sprays.

The trick to flipping for this crowd is to create a top-of-the-line house "that people are blown away with," said Paul Esajian, the owner and chief financial officer of San Diego-based FortuneBuilders, which flips houses in select metropolitan areas nationwide.

His buyers include East Coast hedge-fund and Wall Street managers looking for second and third homes in Southern California.

As "house hobbyists," he said, "they want something that nobody else has."

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