Executive Summary
Wedgewood is a leading residential real estate investment firm with a nationwide presence acquiring, renovation, and selling single family homes.
Purchase volume peaked in early 2022 at over 600 properties per month before falling to as low as almost 100 properties per month in late 2022. Since then, volume has rebounded, with recent months seeing between 250 and 350 properties purchased.
Most properties purchased by Wedgewood are priced between $200k and $400k. However, the company has a presence in California where home prices are higher, with a long-tail of purchases reaching $1M and beyond.
At the end of the article, detailed information is available about the gross margin Wedgewood has achieved on flips cohorted by the month a property was purchased; while returns have been strong in general, they have varied significantly by time period.
Introduction
Wedgewood is a leading residential real estate investment firm. Since being founded in 1985, the company has grown from a small local operation to a major nationwide player in the US residential real estate market. Wedgewood's primary focus is acquiring, rehabilitating, and selling distressed residential properties, particularly single-family homes.
One distinguishing characteristic of the approach taken by Wedgewood is that it is fully vertically integrated; the company handles all aspects of the real estate investment process in-house, from property acquisition and renovation to sales and marketing. In addition to its core business of flipping distressed residential properties, Wedgewood has also diversified into adjacent lines of business, like multi-family housing and commercial properties.
Wedgewood is currently the largest flipper that performs significant renovations in the country. iBuyers like Opendoor and Offerpad are excluded from the “flipper” title because many of the properties the companies purchase don’t require meaningful renovations. Also excluded are companies like New Western and Networth, which double close on properties and don’t perform renovations.
Data Overview
At SFR Analytics, we leverage nationwide deed and assessor data to track the single family residential real estate market. To generate this analysis, we’ve:
Identified and reconciled the entities that Wedgewood has purchased homes under
Processed nationwide deed and assessor data, updated daily
For all home sales nationwide, datapoints like the buyer, seller, sale date, sale amount, loan amount, property address, etc.
Analysis & Results
Geographic Distribution
Wedgewood is active in 21 states and has an extensive presence in the Northwest, Southwest, and Southeast. The majority of their volume comes from the West Coast with a large presence in California.
Purchase Activity
Purchase volume peaked in early 2022 at over 600 properties per month before falling as low as almost 100 properties per month in late 2022; since then, volume has rebounded, with recent months between 250 and 350 properties purchased.
Purchase Price Distribution
Most properties purchased by Wedgewood are for between $200k and $400k, but the company has a presence in California where home prices are higher and a long-tail of purchases reaching $1M and beyond.
Flip Performance
Wedgewood has generally been very successful on a gross margin basis (resale price minus purchase price), though this figure doesn’t take into account labor, materials, and financing costs involved in renovations. Many Wedgewood deals have a gross margin of $80k or greater, leaving plenty of room for profit beyond input costs. Rarely are homes resold for less than purchase price.
Most properties flipped by Wedgewood are held between 80 and 240 days, though a long-tail of longer duration flips exists.
Property Characteristics
Wedgewood primarily focuses on bread and butter properties with three bedrooms, but will also take on two bedroom and four bedroom properties.
Wedgewood’s focus on bread and butter single family homes is also apparent in the distribution of bathrooms, with most properties having two bathrooms.
Wedgewood flips properties with a fairly wide range of building square footage. The bulk of properties have between 1,200 and 2,000 square feet, though a long-tail of properties beyond 2,000 square feet, even beyond 2,500 square feet, does exist.
Cohort-Level Cumulative Gross Margin
While Wedgewood has had a strong gross margin distribution on completed transactions, it has varied significantly over time based on purchase month cohort.
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