More House Flippers Relying on Mortgages Again in Florida Region

More House Flippers Relying on Mortgages Again in Florida RegionHere’s one example of a market teeming with house flippers that may see a replay of the dangerous patterns that fed the financial crisis.
Real estate investors have flipped more homes for profit in Southwest Florida this year than any other time since the mid-2000s, according to a report by the Sarasota Herald-Tribune.
These flippers are capitalizing on rapid price appreciation and huge demand.
But a Herald-Tribune review of hundreds of transactions found that these housing speculators are no longer playing with house money, but are financing their flips by borrowing millions of dollars from large lending institutions, personal financiers and smaller credit unions.
These growing number of gamblers returning to banks for loans is a rehash of the borrowing strategies that marked the housing market meltdown of just five years ago.
The newspaper’s analysis showed that local housing flips generated nearly $23 million in gross profits through the first nine months of the year, or an average of $17,816 per deal.
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