The Fix-and-Flip Fallout: What We're Seeing in the Private Lending Market
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
7e investments53 Reviews
The Fix-and-Flip Fallout: What We're Seeing in the Private Lending Market
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesRates have hurt flippers and those that provide used houses for turnkey marketing companies that operate generally out of LA.
So we have seen a slow down in that area.. So what some of my BRRR folks that were or are flippers by trade are now building their own portfolios and are refinancing to take out our bRRRR loans.. instead of flipping.
Although I have clients that are flipping successfully in certain markets and I personally wont fund anything in FLA or TX . And my niche is the starter house market.. We are still seeing flips as long as the homes are in decent areas super clean rehab and starter homes that even with rates today payments are equal or less than rent..
we have some honey holes that are doing quite well actually but I dont publicize those as I dont want to create competition for my clients :).. They worked hard to find these areas establish their teams and then with our capital they are doing quite well.
FLA is a FOMO and boom bust market same with parts of TX from what I have seen since I was first introduced to both in the mid 80s.. I built some houses north of Orlando we got out of them but just made small profits but at least we did not get stuck like the hundreds of clients that flocked to SWF I have seen that market melt down in the past so there was no way we were going there. And I am sure it was mainly me but we just have not had good experiences in Texas flippng either I have not done new builds but flipping there was/is a challenge with appraisals and foundations and PROPERTY TAXES Then you throw in a good hail storm :)
28 Replies
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Rates have hurt flippers and those that provide used houses for turnkey marketing companies that operate generally out of LA.
So we have seen a slow down in that area.. So what some of my BRRR folks that were or are flippers by trade are now building their own portfolios and are refinancing to take out our bRRRR loans.. instead of flipping.
Although I have clients that are flipping successfully in certain markets and I personally wont fund anything in FLA or TX . And my niche is the starter house market.. We are still seeing flips as long as the homes are in decent areas super clean rehab and starter homes that even with rates today payments are equal or less than rent..
we have some honey holes that are doing quite well actually but I dont publicize those as I dont want to create competition for my clients :).. They worked hard to find these areas establish their teams and then with our capital they are doing quite well.
FLA is a FOMO and boom bust market same with parts of TX from what I have seen since I was first introduced to both in the mid 80s.. I built some houses north of Orlando we got out of them but just made small profits but at least we did not get stuck like the hundreds of clients that flocked to SWF I have seen that market melt down in the past so there was no way we were going there. And I am sure it was mainly me but we just have not had good experiences in Texas flippng either I have not done new builds but flipping there was/is a challenge with appraisals and foundations and PROPERTY TAXES Then you throw in a good hail storm :)
- Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes1y
I've also been told that Kiavi has halted all RTL funding in FL by several sources. As best as I can tell, this is factual. I also saw something that they are stopping all bridge funding nationwide on stabilized properties. It's either perm financing (DSCR) or nothing.
I have directly spoken with 9 or 10 private lenders and institutional RTL lenders in my two markets in the past two weeks. The universal expectation right now is that there will be increased experience requirements and higher borrower contribution requirements (lower LTVs) on RTLs for purchases going forward.
On the primary mortgage market side, we're hearing rumors of coming updates to DU and LPA that will be more conservative on approvals for investment property loans.Ive been expecting this for a while. I know I've mentioned this before on here, but I have seen too many deals in the past year or so that are being strung together by hopes and wishes. A lot of investors are buying doors just to buy doors - there isnt much economic justification behind it, all with way too much risk layering.
My guess is that the institutional lender programs that offer 90%+ flip funding to 1st-time investors are about to evaporate. My other guess is that DSCR loans are going to start requiring higher ratios for upper LTV programs, probably 1.15+.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Patrick Roberts:
I've also been told that Kiavi has halted all RTL funding in FL by several sources. As best as I can tell, this is factual. I also saw something that they are stopping all bridge funding nationwide on stabilized properties. It's either perm financing (DSCR) or nothing.
I have directly spoken with 9 or 10 private lenders and institutional RTL lenders in my two markets in the past two weeks. The universal expectation right now is that there will be increased experience requirements and higher borrower contribution requirements (lower LTVs) on RTLs for purchases going forward.
On the primary mortgage market side, we're hearing rumors of coming updates to DU and LPA that will be more conservative on approvals for investment property loans.Ive been expecting this for a while. I know I've mentioned this before on here, but I have seen too many deals in the past year or so that are being strung together by hopes and wishes. A lot of investors are buying doors just to buy doors - there isnt much economic justification behind it, all with way too much risk layering.
My guess is that the institutional lender programs that offer 90%+ flip funding to 1st-time investors are about to evaporate. My other guess is that DSCR loans are going to start requiring higher ratios for upper LTV programs, probably 1.15+.
RTL = Rate and Term Loan ?? - Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes1y
Quote from @Jay Hinrichs:
Quote from @Patrick Roberts:
I've also been told that Kiavi has halted all RTL funding in FL by several sources. As best as I can tell, this is factual. I also saw something that they are stopping all bridge funding nationwide on stabilized properties. It's either perm financing (DSCR) or nothing.
I have directly spoken with 9 or 10 private lenders and institutional RTL lenders in my two markets in the past two weeks. The universal expectation right now is that there will be increased experience requirements and higher borrower contribution requirements (lower LTVs) on RTLs for purchases going forward.
On the primary mortgage market side, we're hearing rumors of coming updates to DU and LPA that will be more conservative on approvals for investment property loans.Ive been expecting this for a while. I know I've mentioned this before on here, but I have seen too many deals in the past year or so that are being strung together by hopes and wishes. A lot of investors are buying doors just to buy doors - there isnt much economic justification behind it, all with way too much risk layering.
My guess is that the institutional lender programs that offer 90%+ flip funding to 1st-time investors are about to evaporate. My other guess is that DSCR loans are going to start requiring higher ratios for upper LTV programs, probably 1.15+.
RTL = Rate and Term Loan ??Residential transition loan AKA fix and flip
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Patrick Roberts:
Quote from @Jay Hinrichs:
Quote from @Patrick Roberts:
I've also been told that Kiavi has halted all RTL funding in FL by several sources. As best as I can tell, this is factual. I also saw something that they are stopping all bridge funding nationwide on stabilized properties. It's either perm financing (DSCR) or nothing.
I have directly spoken with 9 or 10 private lenders and institutional RTL lenders in my two markets in the past two weeks. The universal expectation right now is that there will be increased experience requirements and higher borrower contribution requirements (lower LTVs) on RTLs for purchases going forward.
On the primary mortgage market side, we're hearing rumors of coming updates to DU and LPA that will be more conservative on approvals for investment property loans.Ive been expecting this for a while. I know I've mentioned this before on here, but I have seen too many deals in the past year or so that are being strung together by hopes and wishes. A lot of investors are buying doors just to buy doors - there isnt much economic justification behind it, all with way too much risk layering.
My guess is that the institutional lender programs that offer 90%+ flip funding to 1st-time investors are about to evaporate. My other guess is that DSCR loans are going to start requiring higher ratios for upper LTV programs, probably 1.15+.
RTL = Rate and Term Loan ??Residential transition loan AKA fix and flip
Kind of reminds me of my flying days all these initials for all sorts of different things. thank you. finally got my permits there in Charleston for my new build on F street.. BAR is just a huge time suck to work through but should all work out in the end for us. Market there for new builds downtown is still quite robust. - Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes1y
Quote from @Jay Hinrichs:
Quote from @Patrick Roberts:
Quote from @Jay Hinrichs:
Quote from @Patrick Roberts:
I've also been told that Kiavi has halted all RTL funding in FL by several sources. As best as I can tell, this is factual. I also saw something that they are stopping all bridge funding nationwide on stabilized properties. It's either perm financing (DSCR) or nothing.
I have directly spoken with 9 or 10 private lenders and institutional RTL lenders in my two markets in the past two weeks. The universal expectation right now is that there will be increased experience requirements and higher borrower contribution requirements (lower LTVs) on RTLs for purchases going forward.
On the primary mortgage market side, we're hearing rumors of coming updates to DU and LPA that will be more conservative on approvals for investment property loans.Ive been expecting this for a while. I know I've mentioned this before on here, but I have seen too many deals in the past year or so that are being strung together by hopes and wishes. A lot of investors are buying doors just to buy doors - there isnt much economic justification behind it, all with way too much risk layering.
My guess is that the institutional lender programs that offer 90%+ flip funding to 1st-time investors are about to evaporate. My other guess is that DSCR loans are going to start requiring higher ratios for upper LTV programs, probably 1.15+.
RTL = Rate and Term Loan ??Residential transition loan AKA fix and flip
Kind of reminds me of my flying days all these initials for all sorts of different things. thank you. finally got my permits there in Charleston for my new build on F street.. BAR is just a huge time suck to work through but should all work out in the end for us. Market there for new builds downtown is still quite robust.Yep. We just went through the BAR and got demo permits last month. Huge pain - been working on that one for 5-6 months with an architect. We're just about done with renderings so we can request variances through BZA. Probably another 2 months or so in that process.
I wish I had known you were looking for lots for new builds. A huge lot next door to where we live in Westside went under contract a couple months ago. It's already entitled with permits for 14 townhomes that likely will like sell for around $1m each.
I think I know exactly which property on F St you're referring to. I sometimes park on F St when I go to my gym. I saw the BAR notice that was posted a couple weeks ago. There's also a rezoning request for the house on the corner of F and I to convert it into a restaurant. That area is gold - will be great for a long term play (although a few of the long time neighbors are a bit rough).
There are a couple potential projects that just popped up in Westside that could be decent with the right vision. I think the peninsula is going to be just fine, no matter what happens to the market at large.
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes1y
Quote from @Chris Seveney:
Over the past few years, I’ve been vocal about the rise of inexperienced fix-and-flippers jumping into real estate with little more than YouTube tutorials and optimism.
Now? The cracks are showing.
In just the past week alone, I’ve seen loan pools totaling over $200 million in defaults cross my desk. These aren’t isolated deals—they’re systemic. And the brokers I’ve spoken to are saying it’s just the beginning. We also have heard rumbling KIavi is moving out of Florida (Ironically more than 50% of these loans are in Florida with heavy concentration in Tampa / Port Charlotte area)
Most of these loans are tied to rehab projects that were either under-budgeted, mismanaged, or never should've been funded in the first place. Rising rates, labor shortages, and inflated ARV projections have pushed a lot of these deals underwater.
It begs the question:
Is real estate finally going back to being a complex business again?
For the past few years, it felt like anyone could throw money at a deal and come out ahead. Now, it’s becoming clear that experience, underwriting, and risk management matter again.
If you're a lender—have you started tightening your standards? Or seen others doing the same?
Would love to hear what others are seeing out there.
It was pretty hard to lose money when the value did nothing but go up for 10+ years. That is no longer the case. Real Estate, like any business, is always going to have a high failure rate. Same with Bars, Restaurants, Day Trading, Crypto, Tech, etc......A small minority make the majority of the money. Such is life.
It's been a falling knife since 2023.
The only reason it's taken this long is because as amateur as the flippers were-- so were the buyers. And even worse-- the egregious agents on and off this forum that kept pumping the dream. The stagnation of the market took all of 2024.
RE takes a long time to season, and it's now just about being put in the oven.
- Member since 2022 · 16 posts · 4 votes1y
I have yet to jump in to Real Estate Properties... I'm a true victim of paralysis by analysis... But your comment about loans being available to first time buyers (i.e. someone like me) evaporating is concerning. That would kill a major source of entry newbie investors like myself.
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1y
Quote from @Michael Shenouda:
I have yet to jump in to Real Estate Properties... I'm a true victim of paralysis by analysis... But your comment about loans being available to first time buyers (i.e. someone like me) evaporating is concerning. That would kill a major source of entry newbie investors like myself.
This would be for fix and flip but DSCR will be around - its gonna come down to how much $ you have - and what will happen is those with money will be able to buy all the deals and get financed if it hits the fan...
7e investments53 Reviews - Member since 2022 · 16 posts · 4 votes1yThat's the point though, if research is done even by a "newbie" fix the flip is a solid easy to get hands on experience in the buying process, identifying scope of work needed, working with contractors, handing normal expenses as well as the unexpected, and then hopefully profiting in the sale.
Quote from @Chris Seveney:
Quote from @Michael Shenouda:
I have yet to jump in to Real Estate Properties... I'm a true victim of paralysis by analysis... But your comment about loans being available to first time buyers (i.e. someone like me) evaporating is concerning. That would kill a major source of entry newbie investors like myself.
This would be for fix and flip but DSCR will be around - its gonna come down to how much $ you have - and what will happen is those with money will be able to buy all the deals and get financed if it hits the fan...
In your scenario new investors will be locked out. - Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1y.
Quote from @Michael Shenouda:
I have yet to jump in to Real Estate Properties... I'm a true victim of paralysis by analysis... But your comment about loans being available to first time buyers (i.e. someone like me) evaporating is concerning. That would kill a major source of entry newbie investors like myself.
Flix and Flip is only one of a multitude of options for investing. We choose to buy properties at discount with creative finance and turn them into rentals. Others are finding mid term rentals are working for them and some are doing "student" housing, renting by the room.
The market has shifted and it's simply time to find a market you like.
History is only repeating itself. In my view, it closely mirrors the conditions that led to the 2008 crash. Lending has become so competitive that many lenders, desperate to close loans, have lowered their standards to the point where almost anyone with the flimsiest qualifications can secure financing for the weakest of deals. They bundle their loans, sell to Wall Street, and work with brokers or affiliates. No one has anything to lose.
The pattern of passing the buck—from brokers to lenders to Wall Street—without any sense of responsibility or accountability has become the norm. BP is a good example. These days, it seems that every other post includes three or four "lenders" urging the OP to “hop on a call” so they can solve their problem (i.e., make a commission). Heaven knows how many fall for the DMs we never see.
I wonder: of the $200M in defaults, how many were originated by a faker lender or joker broker with no skin in the game, versus direct lenders who use their own funds, hold their loans, and only make money when the deal is successful?
We’re just slightly smaller than Kiavi 🤪, but we’ve been lending our own money since 2010. We’re not desperate. We evaluate every property, build real relationships with our borrowers, and as a result, have had only two foreclosures since we started—with zero intention of compromising our criteria.
It’s both interesting and, frankly, shameful that Kiavi mined Florida for all it was worth, then bailed. Good riddance to them. Rest assured: lenders who make sound decisions, work with experienced borrowers, and fund practical deals will step in to fill the gap. Most likely some of the big guys will disappear or they will change their lending criteria.
Couldn’t agree more, Jeff.
The fallout we’re seeing now isn’t just about rising rates — it’s the result of years of pushing capital into deals without real underwriting discipline. When access to money was easy, a lot of lenders prioritized volume over viability. That’s catching up to the market now.
What’s overlooked is how few players were asking the right questions:
- What’s the actual scope of the rehab?
- Has the operator managed a budget of this size before?
- Are the comps real, or just hopeful?
I’ve seen plenty of projects overleveraged from day one — not because the market turned, but because no one challenged the assumptions.
As things tighten, the lenders and investors who survive will be the ones who treat this like a business, not a trade. Relationships matter. Diligence matters. And long-term capital is going to start pricing risk like it actually exists again.
Appreciate your transparency — it’s refreshing.
Quote from @Chris Seveney:
Over the past few years, I’ve been vocal about the rise of inexperienced fix-and-flippers jumping into real estate with little more than YouTube tutorials and optimism.
Now? The cracks are showing.
In just the past week alone, I’ve seen loan pools totaling over $200 million in defaults cross my desk. These aren’t isolated deals—they’re systemic. And the brokers I’ve spoken to are saying it’s just the beginning. We also have heard rumbling KIavi is moving out of Florida (Ironically more than 50% of these loans are in Florida with heavy concentration in Tampa / Port Charlotte area)
Most of these loans are tied to rehab projects that were either under-budgeted, mismanaged, or never should've been funded in the first place. Rising rates, labor shortages, and inflated ARV projections have pushed a lot of these deals underwater.
It begs the question:
Is real estate finally going back to being a complex business again?
For the past few years, it felt like anyone could throw money at a deal and come out ahead. Now, it’s becoming clear that experience, underwriting, and risk management matter again.
If you're a lender—have you started tightening your standards? Or seen others doing the same?
Would love to hear what others are seeing out there.
Oh Steve, you’re just a hater , a dream stealer , a Debbie downer.
i’m just kidding of course, but anybody that’s not a cheerleader seems to be considered negative in our society.- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1yOne analyst said that the number of new builds is the highest it's been in years. Seems some hedge funds are building to "rent to own". But I agree, flipping is for those who know the market and can turn the product quickly with desirable design.
Quote from @Chris Seveney:
Over the past few years, I’ve been vocal about the rise of inexperienced fix-and-flippers jumping into real estate with little more than YouTube tutorials and optimism.
Now? The cracks are showing.
In just the past week alone, I’ve seen loan pools totaling over $200 million in defaults cross my desk. These aren’t isolated deals—they’re systemic. And the brokers I’ve spoken to are saying it’s just the beginning. We also have heard rumbling KIavi is moving out of Florida (Ironically more than 50% of these loans are in Florida with heavy concentration in Tampa / Port Charlotte area)
Most of these loans are tied to rehab projects that were either under-budgeted, mismanaged, or never should've been funded in the first place. Rising rates, labor shortages, and inflated ARV projections have pushed a lot of these deals underwater.
It begs the question:
Is real estate finally going back to being a complex business again?
For the past few years, it felt like anyone could throw money at a deal and come out ahead. Now, it’s becoming clear that experience, underwriting, and risk management matter again.
If you're a lender—have you started tightening your standards? Or seen others doing the same?
Would love to hear what others are seeing out there.
- 1yStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
I believe this issue extends far beyond the fix and flip investors. Specifically the investors who decided to BRRRR their way into the C/D section 8 rental thousands of miles away based on social media gurus sensationalizing the concept. Many of these investors are upside down without even knowing it and are one cub trap or roof replacement away from understanding where they stand. You are already beginnig to hear rumblings on these boards from investors who "can't sell their property" where the real issue is their pricing expectations are not met by the market. There are a ton of investors out there with entirely out of place expectations based on paper equity who will be writing checks when it comes time to sell. I question if they have the funds to make that happen.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Stuart Udis:
I believe this issue extends far beyond the fix and flip investors. Specifically the investors who decided to BRRRR their way into the C/D section 8 rental thousands of miles away based on social media gurus sensationalizing the concept. Many of these investors are upside down without even knowing it and are one cub trap or roof replacement away from understanding where they stand. You are already beginnig to hear rumblings on these boards from investors who "can't sell their property" where the real issue is their pricing expectations are not met by the market. There are a ton of investors out there with entirely out of place expectations based on paper equity who will be writing checks when it comes time to sell. I question if they have the funds to make that happen.
Frankly Stuart this is not a new situation.. Anyone pretty much at any price point or quality of property that is only putting 20% down and then a year or so later finds out land lording is not for them.. Well they are at best at break even and many times upside down.. At least in today's market were appreciation is modest and or properties are sold based on a return on rental income so if rents have not gone up investors are not going to sell their 80% leveraged properties and get all their money back.. Same can be said for homeowners etc.. cost to transact is 6 to 7% some markets higher Like WA state that has a excise tax of 1.7 to 2.2 % of gross that the seller must pay when they sell.. So in my mind at best if a sale is made in a couple years 10% loss of capital is very realistic.. unless the BRRR was done very well and there was significant equity captured at the front end.. But that does not happen often especially with out of state rookies.
Investors many times starting their journey just dont know what they dont know.. Of course many do just fine but many its not a great experience or a great investment. - Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes1y
Quote from @Stuart Udis:
I believe this issue extends far beyond the fix and flip investors. Specifically the investors who decided to BRRRR their way into the C/D section 8 rental thousands of miles away based on social media gurus sensationalizing the concept. Many of these investors are upside down without even knowing it and are one cub trap or roof replacement away from understanding where they stand. You are already beginnig to hear rumblings on these boards from investors who "can't sell their property" where the real issue is their pricing expectations are not met by the market. There are a ton of investors out there with entirely out of place expectations based on paper equity who will be writing checks when it comes time to sell. I question if they have the funds to make that happen.
I've seen a lot of this as well. Investors are reaching for yield with D properties under $100k ARV because they "cashflow". These kinds of properties are highly sensitive to market adjustments. If either prices or rents correct to the point where A and B properties make sense as rentals, those D properties will be impossible to sell.
These properties behave similarly to fixed income instruments as far as the inverse relationship between price and yield. They seem attractive right now due to cap rates and yields across the market, but as soon as cap rates/yields adjust upward, either through rising rents or falling prices, then the yield on these purely cashflow properties will need to adjust through price declines.
Theyre traps - they sorta make sense with market conditions as is, but as soon as market conditions adjust, they will lose value. There isnt any underlying homebuyer demand for value stability and long term appreciation like other properties.
You all bring up critical points — especially around BRRRR investing from a distance.
In the last few years, I’ve watched countless investors buy C/D-class rentals in unfamiliar markets, driven by spreadsheets, hype, and influencer optimism — but without any meaningful understanding of local dynamics, property management risk, or long-term capex exposure. They were chasing yield, not building stability.
The truth is, most of those deals only “worked” on paper — assuming perfect rent, zero vacancy, and no curveballs. But real estate doesn’t play out in spreadsheets. Roofs collapse, tenants skip, management underperforms, taxes spike. The margin for error in these ultra-leveraged, low-equity plays is razor thin — and we’re now seeing what happens when reality sets in.
I’m not anti-BRRRR. I just think too many people approached it like a shortcut to wealth instead of a strategy that requires discipline, reserves, and local knowledge. Paper equity means very little if you can’t exit without writing a check.
We’re entering a market that rewards patience and punishes overreach. And that’s not a bad thing — it’s just a return to fundamentals
- 1yStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
@Jay Hinrichs You raise good points. Many fail to factor in transactionl costs (particularly on the sale side of the transaction) and assume prices only go up. I believe it hits harder when its an investor who BRRRR's their way to 100% recoup of their original capital and believes they have 20%+ equity in their property only to find out they were 95% levered all along and need to write a check to sell. Usually they begin writing checks to address cap ex before they even reach the point where they have to write the check to finally sell their mistake. Its not what they signed up for.
- 1yJorge VazquezBusiness MemberReal Estate Broker · Tampa, FL · Member since 2017 · 1k+ posts · 700 votes
Garrett—love the vision, man. After 23 years investing in Tampa, I’ll tell you this: house hacking is one of the smartest ways to start, but don’t overcomplicate it. Be careful with Pinellas—zoning and flood rules make garage conversions tough. 203(k) loans sound great on paper, but in practice they’re slow, picky, and most sellers won’t wait that long. You’ll need licensed bids even if you’re doing the work yourself. And unless the roof’s leaking, don’t touch it—rehab with “Tonka thinking”: keep it tough, simple, and only fix what truly matters. Also, whatever move you make, think about your next property and your end goal. I always reverse engineer my plan—make sure each deal catapults you toward the next one. Ask yourself: is this building cash flow or equity? Does it help me BRRRR or fund the next down payment? Every step should push you closer to that long-term vision.
– Jorge
Graystone Investment Group519 Reviews - 1yDoug SmithPro MemberLender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
I'm in Tampa as a lender since 1996 and personally as an investor since 2007. When I first started investing, we had luck at the foreclosure auctions, but then every Tom, Dick, and Harry took a Carlton Sheets course and decided they were a real estate investor with absolutely no background or experience. They started overpaying for properties and it became a complete waste of our time even putting in bids as these inexperienced investors would start the bidding way above what the property was worth. I really love working as a lender and mentor to real estate investors, but there is so much bad information out there. Case in point, several years ago, I was speaking at an IMN conference and was approached by a newer real estate investor that had paid thousands of dollars to a guru that also happened to be at the conference...in the audience taking notes. I had the opportunity to speak with him and he had absolutely no idea what he was doing and had overstated his experience to his flock. I agree, Chris, experience is key. As a lender, I do love working with investors...particularly in my home market of Tampa...and we are still lending there, but I think too many private lenders and gurus are enabling inexperienced investors and, in turn, they are loosing their shirts. We do require some experience and, if someone doesn't have it, we recommend that they do smaller, safer deals or get a more experienced partner for a few deals to cut their teeth. Even on BP, I see some really, really bad advice. I've met some great people on here, but I am with you. I see more and more inexperienced investor that read a few blog post and then try to go it alone. I love working with investors and advising them, but for newer investors, that advice is often "don't do it" until you really understand what your doing. They then find someone that doesn't tell them no and then they lose their shirts.
- Specialist · NJ · Member since 2022 · 1k+ posts · 663 votes1y
Ive seen it all too many times. Deals look ok on paper, in theory, it looks like the investor should make money and then the deal plays out in practicality and all the intangibles hit and go against the investor and they get pummeled.
Agents/wholesalers inflate comp packages, GCs underbid estimates to get the job, market conditions can change from when you started till when the for sale sign goes up. People end up in some horrendous scenarios. In over their head, trying not to lose it all instead of winning anything.
I think these educational platforms that glorify isolated results and try to set them as a norm have lots to do with it. I can't tell you how many times people told me they are breaking in to investing and they don't wanna use any of their own money and they heard its possible from a podcast.
My answer is usually for them to call the podcaster and see if THEY would like to stake you.
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1y.
Quote from @Mike Klarman:
Ive seen it all too many times. Deals look ok on paper, in theory, it looks like the investor should make money and then the deal plays out in practicality and all the intangibles hit and go against the investor and they get pummeled.
Agents/wholesalers inflate comp packages, GCs underbid estimates to get the job, market conditions can change from when you started till when the for sale sign goes up. People end up in some horrendous scenarios. In over their head, trying not to lose it all instead of winning anything.
I think these educational platforms that glorify isolated results and try to set them as a norm have lots to do with it. I can't tell you how many times people told me they are breaking in to investing and they don't wanna use any of their own money and they heard its possible from a podcast.
My answer is usually for them to call the podcaster and see if THEY would like to stake you.
A good "no money down" deal requires about $30,000.
- Rental Property Investor · Member since 2018 · 70 posts · 38 votes1y
We’ve been dialing back leverage and really scrutinizing ARVs, especially in overheated markets like Florida. Too many deals were funded on hopium instead of fundamentals. The correction is painful, but probably healthy long-term.
- 1yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
Yeah, I've also been warning about this for several years.
Same thing goes for all the newbies overpaying for STRs.
Both of these will end badly for many, creating opportunities for the rest of us.
Wasn't worried about the overall impact on the market - until chaos hit the stock market and soon the economy.
Now, it may become a bigger problem:(
Logical Property Management4.9462 Reviews - Investor · SoCal · Member since 2021 · 31 posts · 3 votes1y
In the right markets & properties flipping still works.
Yet, FL is unique - highly desirable ~6 months of the year. Much of the most valuable FL RE is built on drained swampland. LT FL RE can only be propped up via heavily subsidized bailouts & HOI aka Federal Govt. $$$.
The irony the most heavily subsidized state in the US does not have state income tax. Why? So the rest of us can pay for their taxes to subsidize their state!
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