How Brokers Can Capitalize on the Surging Fix-and-Flip Trend

The fix-and-flip strategy has become more and more popular with investors recently, with low housing inventory and competitive pricing driving them to search for creative solutions to turn a profit. Fixer uppers can be very lucrative investments though, with most flippers seeing a return of 25-30% in a very short time period. Home flippers rely on investment partners like brokers to help them strategize and make smarter decisions to achieve better returns. As a broker or lending partner, you play a key role in offering not just financing solutions, but also expert insights and a lasting business relationship which leads to more success for both of you.

Interested in learning more about how you can capitalize on this surging asset class? Continue reading for our guide on fix-and-flip properties and how they help brokers win.

Market Trends Driving the Fix-and-Flip Surge

There are several market trends driving investors to turn to the fix-and-flip strategy. As housing supply shortages continue across the US, the market will reward those who are able to turn older and neglected homes into desirable properties. There has also been significant growth in secondary and tertiary markets in recent years, due to the surge in remote work. Tapping into the high demand for homes in one of these areas can lead to great returns, and investors have begun to take notice. The fix-and-flip market is poised for great growth over the coming year, and it presents an opportunity for real estate professionals like you.

Why Brokers Should Pay Attention

What makes fix-and-flip such a good asset class for lending partners though? For starters, many fix-and-flip investors go on to seek out financing again, whether it be a long-term loan for the same property, or moving on to another home flip project. These investors value speed and flexibility, which is something that traditional loans can’t offer. Offering fix-and-flip loans lets you reach a new market segment with great potential for repeat business, and it helps position you as one-stop-shop for real estate financing solutions.

The Lending Solutions That Win Business in the Fix-and-Flip Market

Bridge loans are a type of short-term financing that is perfect for the timeline of a home flip. These loans are offered by private lenders rather than conventional financing providers, and they are secured by collateral, which means they’re more flexible too. Loans can be approved faster, and lenders are more willing to customize loan terms to fit the borrower’s needs.

Unlike conventional mortgages, private loans can cover the cost of renovations on top of property acquisition costs. Plus, many lenders offer interest-only loans, where the principal amount is only due at the end of the loan period. This lets borrowers focus their capital on completing project, and can be a great benefit to fix-and-flip investors.

Broker Strategies to Attract and Retain Flipper Clients

The best way to attract fix-and-flip clients is by marketing yourself as a broker that specializes in the asset class. A great way to do this is to attend industry events where you can connect with these investors, and like-minded professionals. Another key strategy for reaching clients is having a strong social media presence. To bolster your credibility, you can offer free resources in the in the form of market updates, webinars, and deal finds which help position you as an expert in real estate financing. Building your digital brand in this way allows you to better reach your target segment of investors.

Building lasting relationships with clients is another important aspect of your success. To achieve this, you need to create a stellar financing experience for each of your clients. Offering tailored service requires you to have a selection of loan products which can be customized to meet a project’s needs, but you shouldn’t limit yourself to just being a financing provider. You can encourage repeat business through value-added services, including market insights, estimates, and deal structuring tips.

How to Stand Out as a Fix-and-Flip Broker

Then you’ll want to position yourself as a go-to broker for fix-and-flip investors. Leverage your experience in the niche to offer exceptional advice that your clients can’t get in other places. When marketing, share success stories to help build your credibility in the space. Partnering with the right lender will also determine the level of quality service you can provide. Choose a lender that has experience with fix-and-flip investments and understands the importance of speed and responsiveness for success. Better service on the finance end means you can focus on providing a great experience to your clients, and then everyone wins.

RCN Capital

The best way to save on a real estate investment is to obtain financing from a lender that can provide you with the best leverages and rates. RCN Capital lends to real estate professionals, commercial contractors, developers & small business owners across the nation. We provide short-term fix & flip financing, long-term rental financing, and new construction financing for real estate professionals. If you are looking to offer fix-and-flip financing to your clients, RCN Capital has competitive loan options and an award-winning broker referral program available to partners.