The master bedroom is a garish pink, a second bedroom deep purple. But to Jan Brzeski of Westwood lender Arixa Capital, the small house in the hills of Sherman Oaks is all green.

Charging nearly 10 percent interest, Arixa loaned money to wife-and-husband actors and house-flippers Amanda Pays and Corbin Bernsen to buy the property for about $730,000, and he also financed the $175,000 renovation. The couple plan to resell for about $1.3 million.

That’s much pricier than the properties Arixa was lending on when the firm started in 2010, but now that all the cheap foreclosures have been scooped up, its business has shifted toward more expensive homes and more elaborate renovations. And since banks are still reluctant to lend in these postbubble years, more flippers, even on the higher end, have to go to alternative lenders such as Arixa.

“The luxury market is becoming a much bigger piece of the market,” said Brzeski, managing director and chief investment officer at Arixa. “The days when our borrowers were making a great buy, doing paint and carpet, and then selling for a bunch of money, those days are gone.”

Other hard-money lenders – which typically are nonbanks that make asset-backed, short-term loans with steep interest rates – say they’re writing more loans for pricier properties. Over the past two years, institutional investors bought billions of dollars of foreclosed or otherwise distressed homes, often buying in bulk from banks. That’s left flippers and the financiers that back them with little choice but to move up-market.

Between 2009 and 2012, more than half of the loans made by West L.A. hard-money lender Lone Oak Fund were for flippers buying foreclosed homes. Today, such loans make up about 15 percent of Lone Oak’s business, while the number of loans for commercial properties and high-end homes has soared, said Johanna Traynor, a senior loan officer at the lender.

“Some of our borrowers used to purchase a few homes in the $200,000 range at a time,” she said. “But as the inventory from banks dwindled, they realized they had to go for higher-end homes.”

Big flip

When Brzeski raised Arixa’s first fund in 2010 from wealthy individual investors, he was lending almost exclusively on foreclosed homes. Arixa didn’t offer renovation financing then and loans topped out at $500,000. In early 2012, the firm got deeper into the foreclosure market, raising a second fund that purchased foreclosed homes, then renovated and rented them out. It still owns about 50 homes, with plans to buy a few dozen more.

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