Flip or Flop?
House flippers are using real estate crowdfunding sites to buy, renovate and sell homes at an accelerated pace.
One investor has raised over $9 million in the past 2 1/2 years on 9 deals, with one $1 million raise taking only 12 hours on RealtyShares (for accredited investors only).
Borrowing rates compare to hard money lenders at ~14% but the buyers don’t have to share the upside when the homes sell. The flippers have leveraged their crowdfunding with private equity money, some at a 3:1 ration.
Anecdotally, defaults remain low, so far. And some web portal lenders are maintaining funds in bankruptcy remote entities to protect their customers.