The Fix-and-Flip Market Is Back

LOS ANGELES—Remote Rehabs has re-launched its fix-and-flip program in three new cities, thanks to the emerging single-family home market. The program will now focus in Phoenix, Indianapolis and Toledo, and is welcoming new investors, starting this month.

“If you look at the primary markets, there is less than a 30-day inventory, and that is because we have so many home buyers out there scratching and clawing to get a piece of property and trying to beat out investors,” Sensei Sean Gilliland of Black Belt Investors, the parent company behind Remote Rehabs, tells GlobeSt.com. “We have been targeting single-family residences because it is one of the easier products in real estate to move quickly. You have investors that can purchase these properties with cash; you have homebuyers that can purchase these properties with cash; and these properties are easier to finance. Overall, single-family appreciates better than commercial properties because commercial properties are based on cash flows and residential properties are based on comparable sales.”

The company is focusing on the Phoenix, Indianapolis and Toledo markets because, as Gilliland explains, they are emerging markets at the beginning of the cycle, and it is easier to get properties and a reduced cost. “I am in several different markets throughout the United States, and every market offers a different strategy because they are all in a different stage in the cycle,” he says. “You cannot clump the US into one cycle. Every market is in a different cycle.” The firm focuses on private and international buyers.

Although the program has “re-launched,” Gilliland explains that it never really stopped. The program had a backlog of investors, and the company closed the door for new investors. Now, because of the rebounding market—specifically in these three markets—they have reopened it up for new investors to join. “The re-launch is because in the Phoenix market, we had so many buyers in the queue waiting to buy our properties that we had to place it on pause for the last couple of years until we thinned out the line of investors,” says Gilliland. “The reason why we have so many investors in the queue is because we put out a quality product and we tailor investment criteria to each investor. We have had a long line of investors for years, and we have thinned out the program and we are re-launching the program to pull more investors in.”

Although we have heard from various sources that the home buying market hasn't rebounded and that housing prices are softening in some markets, Gilliland is maintaining just the opposite. He explains that we have hit a near pricing equilibrium from the before the downturn and that demand for quality single-family housing is high.