Goldman Sachs getting into the fix and flip loan game
Thought this was pretty interesting. Goldman Sachs is buying a hard money lender called Genesis Capital.
It seems hard money has mostly been a number of smaller independent 'mom and pop' lenders but now it seems the big banks are getting in on the action.
Reminds me a bit of how the big hedge funds started getting into the single family rental business during the crash , buying foreclosures and renting them out to homeowners. A game that was mostly mom and pop.
Do you see Goldman Sachs getting a much larger piece of the hard money lending business and making it harder for small companies to compete?
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House flipping is on the rise as the residential market continues to recover from the subprime mortgage crisis. Last year, borrowers took out $40 billion in fix-and-flip loans, the most since 2006.
“A lot more new home flippers are coming out of the woodwork,” Alex Sifakis of JWB Real Estate Capital told the Journal. They “have seen the (TV) shows.”
Big institutions are taking note. Wells Fargo and JPMorgan Chase both extended credit lines to fix-and-flip lenders. And last year, the Japanese investment bank Nomura securitized $126 million in loans issued by California-based