PodcastSingle-Family Rental

Flipping the Script: A Deep Dive into Tech-Driven Real Estate

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Dean Wehrli

August 4, 2023

Fix-and-flippers seemingly litter the media landscape. If you are reading this instead of pitching a fix-and-flip show to every basic cable station, you need to think about your priorities. But where do flippers get the money to buy all those homes?

One of those sources is Kiavi, a firm started a decade ago that uses a tech-centered approach to loan money to flippers across the country. They recently also entered the single-family market. Stephanie Casper, Chief Revenue Officer at Kiavi, joins me to discuss some of the following topics.

Featured guest

Stephanie Casper, Chief Revenue Officer, Kiavi

Exactly what are we talking about?

  • A fix-and-flip is a loan for a home sold within 12 months of purchase. Most of Kiavi’s clients sell homes within about six months.

  • For these short-term loans, speed and volume can make a big difference to your bottom line.

  • But if you forget the fix, you might not make the flip. Many of these homes are barely habitable. When a fix-and-flipper does their job right—and Kiavi tries very hard not to deal with those who don’t—it can effectively add a unit to our housing stock. In those cases, Kiavi and their clients provide a home for a household that otherwise could not afford it.

Kiavi swims in an Olympic-sized pool

  • The flipper market is huge—$35 billion annually, according to Stephanie.

  • Kiavi is in 29 states with a roughly 11% market share, so they are a big part of a big world.

  • Recently Kiavi entered the booming single-family rental world, a sector that is up to about 20% of their business.

It might be a big market, but it's a tough one

  • There are not enough homes for sale right now, thanks to the golden handcuffs of low mortgage rates, so many of Kiavi’s clients partner with someone who knows the market and can tap into supply.

  • This means Kiavi’s client base is varied, some with fix skills, some with market savvy. Think one person in a suit and the other with a tool belt. If you can pull off a tool belt with a three-piece, you are golden.

  • Stephanie defines Kiavi’s clients in three types, effectively by the level of their activity, but the company serves every type and size of client.

  • The keys to Kiavi’s success are letting technology speed and smooth the process, and keeping their terms competitive to allow for quick closes and happy customers.

  • But it is still crucial, according to Stephanie, for the investor to keep their eye on the prize—the balance sheet and the realistic return. Let the numbers tell you if the deal is worth doing. Or I guess you could just get a reality TV show. That works too.

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About The Author

Dean Wehrli
Principal
Dean helps housing sector clients figure out not just what might work and what might not, but why.

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Products and Services Mentioned

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The quarterly fix and flip Survey provides a new pulse on the fix-and-flip sector, combining data and sentiment to generate the Fix and Flip Market Index (FFMI).

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