Armed with Wall Street money, investors are eager to fix and flip, but they can’t find available properties that need some tender loving care.
“Investors like me, we’re like ants on a sugar hill all fighting for the same projects,” Ed Stock, who fixes and flips houses in New York’s Long Island, told The Wall Street Journal. “It’s the greatest time to be in this market; it’s just hard to find the inventory.”
Home buyers have flooded the market. Foreclosure moratoriums have removed some potential inventory, too. As a result, investors are competing for affordable properties to buy.
Investors are eager to flip, with home prices climbing significantly and creating the potential for high profits on projects. But only 2.7% of home sales were flips during the first quarter, according to ATTOM Data Solutions, which defines a flip as a sale within a year of a prior sale. That is the lowest number of homes and condos flipped since 2003.
Lenders say they have money ready for investors interested in flipping homes. High-interest loans to house flippers are gaining popularity on Wall Street. But inventory woes are preventing more investors from taking advantage and jumping in.
“We’ve seen a lot of competition come into the space,” John Beacham, CEO of Toorak Capital Partners, told The Wall Street Journal. “It’s hard for investors to find deals in a lot of places.”