Rookie real estate investors and rehabbers get their first taste of a downturn
A new crop of flippers, inspired by HGTV reality shows, real estate meetup groups, and get-rich gurus, piled into the market in recent years as rapid price gains helped the last property crash fade from memory. Many newbie investors are encountering their first slowdown and facing losses from houses that take too long to sell. Meanwhile, they face steep payments on a kind of high-interest debt—known as “hard-money” loans—that helped power the boom.
“Flipping only works in an appreciating market where homes move quickly,” says Glen Weinberg, the Denver-based chief operating officer of Fairview Commercial Lending, which is tightening its standards for real estate investors. “Those factors are now in flux, and that’s what’s going to lead to the demise of a lot of flippers.”
This story is from the May 13, 2019 edition of Bloomberg Businessweek.
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This story is from the May 13, 2019 edition of Bloomberg Businessweek.
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