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Overview

History

Fix and Flip as a practice predates the term itself. The concept has been around for a long time, going back to American Colonial times and even in England before American settlement. During this time, it was largely limited due to time and money constraints.

The Post World War II era brought about a housing emergency as soldiers returned home from war. The U.S. government responded in two forms, each contributing to an exponential increase in home construction and purchases (also creating the "suburbs"):
  • Subsidizing housing construction and rehabilitation – via legislation like the Housing Acts of the 1940s – 1960s and GI Bill/Servicemen’s Readjustment Act
  • Subsidizing housing purchases – with programs like the G.I. Bill and Veteran’s Administration home loan program.
Key Aspects

Also at this time, “Hard Money” loans are created and used to buy homes at a reduced price. These loans are largely from private lenders (usually real estate investors) with higher interest rates, lower loan to value (LTV), and are based on the home as an asset (not credit or proof of income).

Fast forward to the 1980s – those post-WWII homes were now 30+ years old. During this time, the two “parents” of Fix and Flip came into existence:
Key Aspects
  • "Do-It-Yourself" (or DIY) – with the influx of home improvement/hardware stores in neighborhoods (i.e. Home Depot, Lowes), television shows like This Old House, and media stars like Bob Vila
  • "Remodel & Sale" – with the economic recession of the 1980s, more foreclosed homes, Americans buying/living in older and foreclosed homes, renovating them, and selling them for a profit.

In today’s world, the average age of homes in the U.S. is 36 years. With the concept of "Remodel & Sale" having been rebranded as "Fix & Flip", a subset funding industry was carved out to support increased American interest.


Here at Acra Lending Fix and Flip, we are committed to ensuring that our Simple, Efficient, and Transparent process will help you reach your fixing and flipping goals.

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