Deals
Home-Flipping Trend Weakens as High-Interest Lenders Jump 40%
- Goldman and Blackstone attracted by rates as high as 12%
- But average gross return on investment at an eight-year low
This article is for subscribers only.
Wall Street giants and individual retirees alike have pumped billions into financing home flips in recent years. Now, a slowdown in the flipping business threatens to rain on the party.
So-called "hard money,” which comes from sources other than banks and which carries higher interest rates, is hard to track because it’s fragmented and littered with thousands of small players doing one or two deals a year. However, a for-profit trade group called the American Association of Private Lenders estimates the number of hard money lenders and related “private money” lenders at 8,300, or up almost 40% since 2016.