From the New York website: House flipping is back, and a growing number of banks are jumping on the trend.
The number of flipped homes in the U.S. reached the highest level since 2007 in the first nine months of the year, thanks to rising home prices and growing investor confidence. The average profit on flips is now $61,000, up from $19,000 in 2009, the Wall Street Journal reported.
With profits on the rise, lenders see an opening. Wells Fargo, Goldman Sachs and JPMorgan Chase have all begun extending credit lines to lenders that back home flippers. Two of those lenders are LendingHome and Asset Avenue, California startups that allow house flippers to borrow over the internet. LendingHome claims to have issued $1 billion in loans since its launch in 2014.
Anchor Loans, one of the largest lenders to home flippers, said it expects to originate $1.1 billion in loans this year, up from $713 million last year.
A third of house flips are now funded by debt, but the overall market remains small. Sources told the Journal that several hundred millions of dollars worth of home-flipping have closed in recent months.
“Anybody and everybody is getting into the business of house-flipping—that’s when you know it’s the end of the rope,” California-based real estate agent and home flipper George Geronsin told the Journal. [WSJ] — Konrad Putzier