The State of Home Flipping and Crowdfunding in 2017 – So Far

August 1, 2017 Chelsea Strong

It seems just like yesterday that we were gathering our 2017 predictions, and now half of the year has passed. Now might be a good time to take a moment to reflect on the state of the market – where it’s been, where it is, and where it’s going to get a larger perspective as we move into the later half of 2017 and beyond. Here are the trends that are making an impact:

 

Home flipping loan volume is at an all-time high.

According to a recent report on home flipping by RealtyTrac, “one-third (33.3 percent) of all single family homes and condos flipped in Q1 2017 were purchased by the flipper with financing, up from 31.9 percent in Q4 2016 and up from 29.5 percent in Q1 2016 to the highest level since Q3 2008, when 37.6 percent of completed home flips were purchased by the flipper using financing.”

The report shared that “The business of financing for home flippers continued to grow in the first quarter of 2017 even as the home flipping rate plateaued compared to a year ago and average home flipping returns decreased for the second consecutive quarter.”

Business concept vector illustration. Investing, real estate, in

There is a global shift towards alternative investments.

In these changing economic times as investors look at the income potential of banking, IRAs, the stock market and 401ks; people are starting to realize that if they want to secure their financial future they might want to consider alternative investments.

In an age where investors are looking for multiple streams of income,  alternative investments can provide people with opportunities to invest and ultimately compete in the bigger financial game. In a recent U.S. News article, they shared that crowdfunding offers a new way for qualified individual investors to get into the real estate market, democratizing the process.  Investors are benefiting from the transparency and data availability in the real estate crowdfunding space and are finding platforms that offer the services best tailored to meet their needs.

 

Crowdfunding has made a permanent impact on real estate investing.

Crowdfunding has truly changed real estate investing. According to Inc., real estate investing through crowdfunding provides flexibility, opportunities for exposure, speed, and efficiency. Property owners and flippers have been able to more easily secure investors, while those who are investing have infinently more opportunities when they’re not bound by the constraints of location and networking to access deals. The industry is in a growth trajectory.

 

Home flipping offers a postitive outlook, perhaps more so in the “luxury” market.

Despite its potential, home flipping is still a challenging business. You never know for certain what types of problems lurk above those old vermiculite ceilings and rusted pipes (and how much they’re going to cost), or when someone will buy. However, home flippers continue to have a positive outlook.

The ATTOM Data Home Flipping and Crowdfunding Report for 2017 shared that home flippers financed an estimated $3.5 billion in purchases for homes flipped during the first quarter of 2017, up from $2.4 billion a year ago, the highest level since the fourth quarter of 2007. That’s more than a nine-year high.

recent CNBC report indicated that there are opportunities to fix and flip more “luxury” properties, and those in the business are looking at making more value-added improvements to meet the needs and requirements of upscale purchasers.

 

Cities that are ranked “the best’ for both home flipping and investing (right now).

According to Forbes, one of the top places to invest in housing is Texas, mainly because unlike much of the United States, there is a lot of space available to create inventory. Many Texas cities also made WalletHub’s list of the best cities for home-flipping in 2016, including El Paso, Lubbock, Laredo and Corpus Christi in the top 20.

Florida also ranks as a top investment region for housing, and dozens of Florida cities are ranked highly by both Time-Money and WalletHub for house flipping like: Jacksonville, Tampa, St. Petersburg and Daytona Beach, to name a few. Forbes ranks Boston as a top investment city and Time-Money ranks Baltimore as the #1 city for house flipping.

 

Looking Forward to Growing Opportunities

As we move towards year end, we can’t wait to see which markets will continue to provide profitable opportunities for savvy real estate investors.  Learn more about building wealth and growing communities at Patch of Land.

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