Fix-and-flip investors know better than anyone just how important the kitchen is to overall investment returns, but knowing how and at what level to do the right kitchen remodel is vitally important. According to Remodeling Magazine, minor kitchen remodels return roughly 93 percent at resale in a home, making them imperative for many investors flipping to retail buyers, particularly in hot markets where investors are compelled to purchase and renovate older properties to make their deals work consistently.
“More and more, we’re seeing investors on all levels, from homeowners to home-flippers to multifamily builders, coming into our design centers and asking for not just one set of prices and materials, but at least three: good quality, better quality, and best quality,” said Mark Reginelli, director of world trade at 84 Lumber, a building supply company with 260 locations nationwide. Reginelli said that in recent years, 84 Lumber has found its services in kitchen design, consultation, and scaling projects in increasingly high demand as the minor kitchen remodel becomes a major factor in real estate investments.
“We started out as a cash-and-carry company that dealt mostly with roofers and remodelers, but we also stocked kitchen cabinets at that time. As our company and client base grew, we discovered that they needed consistency, we became a trusted source for multi-state and multi-market projects, ” Reginelli explained. The 84 Lumber Kitchen and Bath Design Studios spread quickly across the country and are still growing.
There for the Investor
Reginelli noted local remodelers and contractors will often do between 15 and 20 projects a year, and real estate investors on the same scale may do between one and two dozen. “These companies need as much consistency in their models as possible to make good investment decisions. They will often come in with a blueprint for a kitchen F and want to replicate it across the board every time they take on a new project, much the same way that a developer will when they build a new subdivision. We found that the studios are equally attractive to these really large clients and individual investors,” Reginelli said.
84 Lumber’s studios offer three-dimensional modeling so that investors can view their designs and swap out different looks and price points to reach a combination that meets the demands of both their markets and their budgets. “The same basic kitchen might add $1,500 worth of value in one market and $15,000 in another,” Reginelli said. “It’s vitally important investors have the ability to translate that from market to market.”
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