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Backflip is an app for real estate investing with renovation analysis and lending components.
Platforms: iOS; Android; Web
Ideal for: Individual investors; agents
Top selling points
- Built-in lending program
- In-depth renovation valuations
- Intuitive transaction management
- Extensive comp analysis
- Staffed advisement; support
Top concern
I’m skeptical about the after-repair valuations, or better stated, the upfront forecasting of the cost if not accompanied with local labor cost data. But generally speaking, home rehab projects are all but guaranteed to include cost overruns, and it could be cool to see the app offer regional data for the average, “after-budget” costs.
What You Should Know
Backflip is a mobile application to help real estate investors find, analyze and buy property. The company is a lender, integrating fintech functionality that allows users to apply and gain approval either before they find a suitable investment or at the point of engagement. The software offers a comprehensive search experience in 41 U.S. markets, providing extensive location context, rent analysis and granular comparative analyses. Investors can enter an individual address or use a photo that relies on geospatial data. Backflip provides ARVs-after repair valuations to help investors shape buying decisions. The financial components can be considered a significant sigh of relief from the agony of traditional lending practices, which are often exacerbated in an investment setting.
Backflip is an outstanding example of just how well technology can flatten the long-manual, vexing real estate practice of finding and eventually flipping, single-family properties. Its intent is to make real estate investing something for everyone, or at least those comfortable enough to buy and borrow from a mobile app. Thus, this isn’t going to appeal, at least not yet, to your old-school ham-and-egger landlords.
And that’s fine; it’s not supposed to. Here’s how I see it:
A good deal of younger professionals are being locked out of homeownership. They make plenty of money, but that doesn’t mean they have $150,000 in cash to compete for a house in an inventory-starved market. And rightfully so, maybe they don’t want to move to a more economically accessible market. It’s okay to want to own and live where you do. Those goals can co-exist.
Companies like Backflip can give that demographic its opportunity to be part of the real estate economy. Collectively, they can qualify for a loan, and they’re perfectly comfortable tapping and swiping through Backflip’s extensive, engaging user interface, which I found inspires confidence in the overall process and that they’ll be investing under the guidance of a company that’s in it with them.
Property data and the subsequent financial metrics are swiftly broken down to clearly display transaction and loan fees, interest rates and rehab costs, all of which are delivered in an intuitive terms sheet.
Note that, in essence, Backflip is a hard money resource, meaning investors can expect to pay above-average rates under short terms. Naturally, that’s a big part of its ability to make the process more streamlined. But let’s not act like private lending and real estate investing aren’t intrinsically connected.
The app helps users frame a strategy for each investment, determining if it’s best to buy and hold, rent, and what leverage options to consider. And it can do that for each property it recommends and applies comps accordingly.
Repair valuations accompany each investment option, but I do find them subject to great scrutiny. They’re just never, ever accurate and I’d like to see the app make more transparent the risk of cost overruns. The day a contractor hits budget is the day I win the Powerball. Costs can be managed, but not controlled. In response to this, Backflip offered a fair, reasonable response:
“Backflip remains closely involved throughout construction. We provide 100 percent of the capital to fund the renovation for nearly all our members’ projects. Progress inspections are completed using a smartphone camera, which facilitates rapid disbursement of funds so trades can get paid quickly. While today the rehab design and budget remains an important part of the entrepreneurs’ homework, Backflip is building a proprietary dataset to inform cost assumptions and even projected return on costs at the submarket level.”
I accept that.
Backflip’s intent remains transparent, and its functionality, integrated lending, hands-on oversight and management expertise collectively speaks for itself. This is a great overlap of fintech ingenuity and the desire of its target market to be part of the real estate industry.
Have a technology product you would like to discuss? Email Craig Rowe
Craig C. Rowe started in commercial real estate at the dawn of the dot-com boom, helping an array of commercial real estate companies fortify their online presence and analyze internal software decisions. He now helps agents with technology decisions and marketing through reviewing software and tech for Inman.
