House flipping, which served as one of the canaries in the coal mine before the house collapse, is apparently back on the map, in California, at least.
The Wall Street Journal has the details on the rise of house flipping, much of which is occurring in California.
According to the WSJ piece, more than just small investors are now involved in flipping…big banks are coming back too.
From the WSJ:
After nearly being felled by real-estate forays almost a decade ago, a number of banks are now arranging financing vehicles for house flippers, who aim to make a profit by buying and selling homes in a matter of months. The sector is small—participants say roughly several hundred million dollars in financing deals have been made in recent months—but is expected to keep growing.
In recent months, big banks, including Wells Fargo & Co., Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. have started extending credit lines to companies that specialize in lending to home flippers. Earlier this month, J.P. Morgan agreed to lend an estimated $60 million to 5 Arch Funding, an Irvine, Calif., company that offers financing to flippers, according to people familiar with the deal.
In the words of one flipper, “the floodgates have opened” when it comes to finding financing for flipping.
Again from the WSJ:
The number of investors who flipped a house in the first nine months of 2016 reached the highest level since 2007. About a third of the deals in the third quarter were financed with debt, a percentage not seen in eight years.
Trying to win business, big banks in the past few weeks have flown executives to Southern California—where much of the house-flipping activity is occurring—to organize funding deals, say people familiar with the meetings.
The article has much more on how flipping is coming back, riding a wave of both reality TV and crowdfunding.
Click here or below for more from the WSJ.