Private equity giants giving bridge loans to home flippers

Small-time business is one of the last fragmented lending sectors

New York /
May.May 08, 2015 10:00 AM

Wall Street is deepening its investment in the housing sector, with an increasing number of major institutional investors now providing bridge loans to small-scale home flippers.

Colony Capital, Cerberus Capital and Blackstone Group are among the firms that have started making the loans to investors who buy homes and quickly sell them for a profit, a practice that is benefiting from rising prices, a shortage of inventory and limited new construction, according to Bloomberg News.

“It’s one of the few highly fragmented businesses left,” said Beth O’Brien, CEO of Colony’s lending business. “If someone can do it nationally at scale, it’s cheaper and better for the borrower.”

Bridge loans, which are backed by the real estate, give investors cash for home purchases and renovations with about a year to repay.

Blackstone plans to make $1 billion of these types of loans per year. [Bloomberg News] — Tess Hofmann


Related Articles

arrow_forward_ios
Blackstone secures $1.1B refi on Sun Belt multifamily portfolio
Blackstone secures $1.1B refi on Sun Belt multifamily portfolio
Blackstone secures $1.1B refi on Sun Belt multifamily portfolio
RealSure CEO Katie Finnegan (LinkedIn)
Realogy, Home Partners of America iBuying venture hires first CEO
Realogy, Home Partners of America iBuying venture hires first CEO
Real estate powers Blackstone’s best quarter ever
Real estate powers Blackstone’s best quarter ever
Real estate powers Blackstone’s best quarter ever
Main-MainImage_.psd FT-Thumbnail_.psd
Blackstone to net $4B profit in sale of Vegas casino
Blackstone to net $4B profit in sale of Vegas casino
Blackstone Group's Stephen Schwarzman, KKR's Henry Kravis and Apollo's Leon Black (Getty, Facebook, iStock)
Blackstone, Apollo, KKR take market hit on Evergrande tumult
Blackstone, Apollo, KKR take market hit on Evergrande tumult
The Cosmopolitan of Las Vegas at 3708 Las Vegas Blvd S and Blackstone CEO Stephen Schwarzman (Google Maps, Getty)
Blackstone marketing Cosmopolitan Las Vegas for $5B
Blackstone marketing Cosmopolitan Las Vegas for $5B
Blackstone buying WPT Industrial in $3B deal
Blackstone buying WPT Industrial in $3B deal
Blackstone buying WPT Industrial in $3B deal
Blackstone, HPP look to expand studio empire to the UK
Blackstone, HPP look to expand studio empire to the UK
Blackstone, HPP look to expand studio empire to the UK
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...