Fix & Flip Financing: How Technology is Changing the Real Estate Investment World  

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Fix & Flip Financing: How Technology is Changing the Real Estate Investment World  

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The act of flipping residential property is nothing new, but technological advances geared specifically for real estate investments are making significant changes in the way in which investors find and fund these properties. In fact, according to recent industry statistics for the second quarter of 2016, the number of real estate investors actively participating in fix and flip investments reached a nine-year high, but the number of those who purchased with traditional cash was actually lower than at any point since the third quarter of 2008 and the reason lies with technology.

Advancing the goals of real estate investors

Historically, finding real estate property loans for the purpose of investing has not been easy. Conventional financing, such as that used for owner-occupied homes, was usually available but processing this type of loan was rarely able to be accomplished within the tight time constraints needed by those interested in purchasing properties in a competitive real estate investment market setting. This meant that investors with the ability to pay cash, or those using hard money loans much better situated to secure the best properties.

The growing use of technology today is changing the modern investing landscape in positive ways and leveling some of the obstacles that fix and flip investors once faced. More than just a trend, venture capitalists alone poured more than $1.5 billion into tech startups in the real estate field in just 2015.

Better for investors and lenders

With the ability to reduce the speed at which a real estate investment transaction can be completed while making the entire process much more convenient has helped to ensure that investors welcome and embrace these changes. No longer bound by geographic limitations for finding the properties or funding their purchase, today’s real estate investors enjoy the ability to look for the best investments on a global scale, knowing they can rely on online lenders to provide financing quickly and easily, often with loan values of up to 75 or 80 percent of the property value.

Investors are not the only ones benefiting from these technological advancements. Much of this new technology bolsters the data collection, monitoring, and evaluation aspects of the real estate industry, making it much easier for lenders and underwriters to maintain high lending standards and improve the way in which they make and issue investment property loans. This allows the fix and flip investor to step away from the use of tedious spreadsheets and paper files and enjoy a much more flexible and profitable business model.  Lenders such as   SNAP.BUILD, based in Jacksonville Florida, use the latest technology to better coordinate the loans with builders, allowing it to pay the builders vendors directly and as often as weekly including managing the lien release process.   Steve Emsley of SNAP.BUILD notes that ”SNAP becomes the back office for the builder, allowing the builder more time on sites and finding new deals.”

Technology in real estate investing is not going away

The level of technology used throughout the real estate industry will continue to streamline the process from first look through closing and beyond. Real estate investors working alongside online lenders through technology will continue to change and mold the industry into a more global model capable of sustainable growth for years to come.