CHICAGO—House-flipping became a popular activity for investors in the aftermath of the recession, but even though the market is no longer flooded with distressed inventory, the practice remains common. But what has changed for these ventures in the past few years is the rise of alternate forms of financing.
Of the 45,718 homes flipped in the third quarter, 67.9% were purchased with cash, an eight-year low, and down from 68.2% in the previous quarter, according to a December report by ATTOM Data Solutions. ATTOM considers a home flipped if it sells in an arms-length sale for the second time in 12 months.
“The lion's share of this work, about 80 to 90%, is done by individual investors,” Eric Workman, vice president of marketing at Renovo Financial, tells GlobeSt.com, and more people seem willing to take on that risk. But these deals typically don't fit the needs of local banks, so investors frequently “need specialty financing in order to do it.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
