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Housing Market Challenges Remain, Investor Fix & Flip Loans Present Opportunity

March 15, 2023
After a period of almost no foreclosures and skyrocketing home prices, the housing market is shifting to a new normal.

The housing market is shifting. After a pandemic era defined by almost no foreclosures and soaring home prices, a new normal is settling in.

Consider foreclosures: ATTOM Data Solutions reports there were 31,557 properties with foreclosure filings nationwide in January 2023, up 36% from a year earlier. That’s a small overall number compared to the Great Recession, of course, but the upturn in default notices and repossessions indicates that the housing market is returning to historical norms.

For your investor clients, the housing slowdown presents an opportunity. Monthly rents on residential properties continue to rise, and investors can generate more passive income by adding to their property portfolios.

Another macro trend is housing affordability – primarily the lack of it. While home prices have peaked and even retreated in some parts of the country, the jump in mortgage rates has squeezed affordability.

Housing affordability hit a record low in the fourth quarter of 2022, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index.

“Rising mortgage rates, supply chain disruptions, elevated construction costs and a lack of skilled workers and lots all contributed to a declining housing market and worsening affordability conditions going back to the second quarter of last year,” says National Association of Home Builders Chairman Alicia Huey.

That reality has dampened demand from first-time homebuyers. Instead of moving into homeownership, many young adults are remaining renters for longer. While that’s a long-term economic challenge, it also makes real estate investment attractive.

Finally, many housing economists say the real estate industry is already pulling out of the housing recession of late 2022. Home values are holding steady, and mortgage rates, after topping 7% last year, have fallen back into the 6% range – boding well for the housing market.

LendSure’s Fix & Flip Home Financing Program is ideal for the investors who are adjusting to the new reality of the housing market. Investor Fix & Flip loans were created for real estate investors who want to leverage the purchase and renovation of a property. It’s a short-term loan, so our investor Fix & Flip solutions are created for entrepreneurs who intend to exit with the sale of the property, or to refinance into a long-term rental DSCR loan.

With home flipping still attractive to many investors, borrowers are looking for an out-of-the-box solution for their unique needs. LendSure’s Fix & Flip program offers up to 85% of the purchase price, and up to 100% of the construction cost on some loans. The total loan amount is up to 85% of the total cost. In the interest of transparency, we offer this caveat: The program does not necessarily offer 85% and 100% of the construction cost on every transaction.

Here’s a common scenario: Say an investor pays $275,000 for a property and expects to spend $100,000 on renovations. LendSure would loan up to 85% of the acquisition costs, or $233,750, and up to 85% of the renovation costs, or up to $85,000. This video gives an overview.

We strive to deliver an answer on Fix & Flip applications within hours, not days. We work with clients with a credit score as low as 660, and our interest rates are competitive. We primarily service single-family and multifamily properties, but LendSure also considers mixed-use properties, on an exception basis.

It’s important for Account Executives and investors to work with a trusted lending partner. LendSure focuses on their best interests through a personalized, tailored approach. Account Executives can connect with their investors to help them diversify their Investor portfolio.

The LendSure Way

It’s simple. We make loans that make sense. We’re not in-the-box lenders. Of course, there are numbers and ratios, and data to consider, but we know that behind every file, there’s an individual with a unique circumstance seeking a loan.  We work hard to offer our common-sense take on lending to borrowers seeking funding for the home of their dreams, another addition to their investment property portfolio or refinancing of a currently owned property.

Are you ready to grow your business? Conforming loan approval guidelines can be restrictive, but we want to offer our mortgage broker partners the education, tools, support, and the guidance they need in order to say “yes” to more of their clients.  This ensures happy borrowers and opportunities for bottom-line growth. What are you waiting for? Let’s get started!

Are you ready to benefit from a commonsense approach to lending?  Contact us today to learn more about non-QM loans and how partnering with LendSure Mortgage Corp. can help grow your bottom line.


Contact Us: (888) 707-7811