Is Fix and Flip Dead? Wait not so fast....!

[KB Collins]

I felt I needed to add this post as an article since I believe the underlying theme is very important. I want you to read this post from the perspective of a flipper and then as a street capital provider while keeping in mind, what has been, the symbiotic relationship that both these rolls have had over the years.

"Fix and Flip on Life Support? I have been hearing a lot of talk that Fix and Flip is dead with some companies focusing on other "Hot" areas of lending. Well I think that is happening but the fact that Fix and Flip is dead is not completely true.

Under current Capital Market requirements the big boys on Wall Street currently have, I believe the rehab market is on life support (of course in my opinion). I believe a few things need to change or as we hear in many of these capital market meetings - shift - within Lenders Guidelines. Guidelines need to change to make sure the Flippers are not being replaced completely by the next big rage "New Construction".

I believe in the next few weeks or months companies that only did Fix and Flip / Bridge Loans with a couple of rental loan thrown in for good measure will SHIFT to funding Ground Up New Construction. The Shift that is really happening is Wall Street is shifting interest to New Construction and companies you know well will roll out NEW CONSTRUCTION LOANS! (I can write about another 20 post just on that! I wont, maybe?...)

For me it is a natural progression for a fix and flip team to move into new construction, but I believe that with a small "shift" (there goes that word again) capital providers will see many more years of successful loans and flippers with actualize real profit.

I hope that Capital Markets do make that shift within their guidelines and not totally shift to New Construction Lending. I believe that we have to make sure future flippers have the opportunity to do what they do so well, and bring new life into areas where property rehab is so desperately needed."

I think a lot of these conferences have shown that we need to make sure we do not leave the investor out in the cold, while trying to please the capital markets at every market shift. Couple that with the new proposed limitation on IRA investments coming down the line, we need to make sure we capitalize our markets responsibly.