TR-HNR-August-September-2019

STRATEGY

FLIPPING TRENDS

Flipping Trends WHY INVESTOR DEMAND IS PICKING UP EVEN AS HOME-FLIPPING PROFITS DRY UP.

CONSTRUCTIVE LOANS OFFERS CREATIVE FUNDING FOR BOTH NEWAND EXPERIENCED INVESTORS We are a National Lender with Flexible Options to meet your needs.

by Daren Blomquist

fter falling off in late 2018, the U.S. home flipping rate rebounded to a nine-year high in the first quarter of 2019, according to a recent report from ATTOM Data Solutions. ATTOM’s Chief Product Officer Todd Teta concluded that the jump in home flipping was likely due to real es- tate investors “getting out while the getting is good” — especially given a corresponding decline in the average gross flipping return, which dropped to a nearly eight- year low in the first quarter. That “getting out while the getting is good” senti- ment certainly rings true among larger-scale investors, according to Jason Medley, founder of the Collective Genius, a mastermind group of high-volume real estate

investors from across the country. “They are naturally becoming more cautious,” said Medley of the group of about 120 investors that average about 100 flips each per year. “They are shrinking their buy box … compressing back to the good neighborhoods … your tolerance for what you are willing to pay is shrinking.” Medley said many of the investors in the group, including himself, went through the pain of the last housing bubble bursting, and want to avoid a repeat of that experience. “There is one thing that I am completely and absolute- ly sure of: I don’t want to start over. How do you make sure that doesn’t happen? You exercise caution,” he said. “If you have 30 rehabs going at once, and 30k into each one as equity on the loan, it may seem like you are a

We finance single-family, both warrantable and non-warrantable condos, mixed-use properties up to 4 units, and multi-family properties up to 40 units.

RENTAL LOANS

FIX AND FLIP LOANS

HOME-FLIPPING RATE UP DESPITE DWINDLING PROFITS

• LTVs up to 85% for Purchase and Rate and Term Refinances • Loan Amounts up to $2,000,000 • 30 & 15 Year Fixed, ARMs, Interest Only Options Available on Both • Debt Service Coverage Ratio of only 1.0 • No Income Verification and no DTI Requirements

• Interest Only Payments • Up to 95% Loan to Cost (LTC) • Up to 100% Rehab Financing Available • Lines of Credit up to $10,000,000 • Loan Amounts up to $5,000,000 • No Income/Employment Verification and no DTI Requirements

HOME-FLIPPING RATE (PCT OF TOTAL SALES)

AVG GROSS FLIPPING ROI

10.0%

60.0%

9.0%

50.0%

8.0%

7.0%

40.0%

6.0%

To learn more about what we can do for you, call (844) 562-7407 or visit constructiveloans.com today!

30.0%

5.0%

4.0%

20.0%

3.0%

2.0%

10.0%

Loans are provided by Constructive Loans, LLC, except in AZ, CA, MN, OR and SD, where products are offered by Fay Servicing, LLC d/b/a Constructive Mortgage Services. NMLS ID 88244. Visit www.nmlscosumeraccess.org for additional licensing information about Fay Servicing, LLC.