Investors pile into house-flipping

Earnings on home sales rise but so do prices

National /
Mar.March 19, 2021 11:15 AM
(iStock/Illustration by Kevin Rebong for The Real Deal)

(iStock/Illustration by Kevin Rebong for The Real Deal)

The number of investors backing house-flippers jumped 50 percent in two months, as low interest rates continue to drive the hunt for higher profits.

Research firm Attom Data Solutions found that the gross earnings on a fix-and-flip home reached a little more than $66,000 in 2020, the highest since 2005, Bloomberg reported. But prices have increased for such homes, slightly reducing the profit to 40.5 percent last year compared with 41.5 percent in 2019.

House-flipping mortgages, meanwhile, carry an average annual rate of 7.9 percent, more than twice the 3.09 percent rate for a 30-year mortgage. Talk show host Ellen DeGeneres has become one of the most prolific luxury home-flippers in Los Angeles. Less than two years ago, DeGeneres paid $42.5 million for Maroon 5 frontman Adam Levine’s Beverly Hills mansion, and recently listed it for $53.5 million.

Financial firms backing the flippers are not, however, the most-recognizable names on Wall Street. Many of those firms invested heavily in single-family rentals after the foreclosure crisis, but the firms investing in house-flipping today are primarily regional banks and alternative lenders.

[Bloomberg] — Georgia Kromrei


Related Articles

arrow_forward_ios
From left: 909 Third Avenue, 79 Fifth Avenue, 240 West 37th Street and 27 East 62nd Street (VNO, Cercone Exterior Restoration, Google Maps)
These were the largest Manhattan real estate loans in April
These were the largest Manhattan real estate loans in April
Of the 110 metro areas with at least half a million people, 29 saw losses in 2020. (iStock)
More urban areas lost population in 2020
More urban areas lost population in 2020
Zillow CEO Rich Barton (Getty)
Zillow profits hit record $52M in Q1
Zillow profits hit record $52M in Q1
(Getty, iStock/Illustration by Alexis Manrodt for The Real Deal)
Renters prepare for eviction crisis as aid is held up
Renters prepare for eviction crisis as aid is held up
2468 Kenmore Street in East Meadow (Google Maps)
Long Island man evades eviction for 20 years
Long Island man evades eviction for 20 years
Lenders are being stingy about granting home equity lines of credit. (iStock)
Home values are up, but just try getting a line of credit
Home values are up, but just try getting a line of credit
Every region except the Midwest saw month-over-month and year-over-year increases in pending sales. (iStock)
Pending home sales rebound
Pending home sales rebound
(Getty)
Mortgage applications resume decline after one-week surge
Mortgage applications resume decline after one-week surge
arrow_forward_ios

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

Loading...