Backflip app for investing in real estate

Backflip is a standout example of how technology can iron out real estate’s long manual and vexing practice of finding and eventually flipping single-family properties.

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Backflip is a real estate investment application with renovation and loan analysis components.

Platforms:iOS; Android; the Web
Ideal for: Individual investors; officers

Main Selling Points

  • Integrated loan program
  • In-depth renovation expertise
  • Intuitive transaction management
  • In-depth composition analysis
  • reviews with staff; support

Main concern

I’m skeptical of post-repair appraisals, or better, the initial cost estimate if it’s not accompanied by local labor cost data. But generally speaking, home rehab projects are almost guaranteed to include cost overruns, and it might be interesting to see the app offer regional data for average “after budget” costs.

What you should know

Jump back is a mobile application to help real estate investors find, analyze and buy property. The company is a lender, incorporating fintech functionality that allows users to apply and get approved before finding a suitable investment or at the time of commitment.

The software offers a comprehensive search experience across 41 US markets, providing extensive location context, rental analysis, and granular benchmarking. Investors can enter an individual address or use a photo that relies on geospatial data.

Backflip provides post-repair ARV assessments to help investors shape their buying decisions. The financial components can be seen as a significant relief from the agony of traditional lending practices, which are often heightened in an investment context.

Backflip is a standout example of how technology can iron out real estate’s long manual and vexing practice of finding and eventually flipping single-family properties. Its intention is to make real estate investing something for everyone, or at least those who are comfortable enough to buy and borrow from a mobile app. So it’s not going to sit well, at least not yet, with your old school ham and egg owners.

And it’s good; it’s not supposed to. Here is how I see it:

A good number of young professionals are excluded from home ownership. They’re making a lot of money, but that doesn’t mean they have $150,000 in cash to compete for a home in a stock-starved market. And rightly so, perhaps they don’t want to move to a more economically accessible market. It’s okay to want to own and live where you do. These objectives can coexist.

Companies like Backflip can give this demographic the opportunity to be part of the real estate economy. Collectively, they can qualify for a loan, and they are completely comfortable typing and navigating Backflip’s expansive and engaging user interface, which I believe instills confidence in the overall process and that they will invest under the guidance of a company that is with them.

Property data and subsequent financial metrics are quickly broken down to clearly display transaction and loan fees, interest rates and rehabilitation costs, all of which are provided in an intuitive term sheet.

Note that, in essence, Backflip is a hard money resource, which means investors can expect to pay higher than average rates in the short term. Naturally, that’s a big part of his ability to streamline the process. But let’s not act as if private lending and real estate investing aren’t intrinsically linked.

The app helps users strategize for each investment, determining whether to buy and hold, lease, and what leverage options to consider. And he can do this for each property he recommends and apply the comps accordingly.

Repair appraisals come with every investment option, but I find them subject to scrutiny. They are never, ever accurate and I wish the app made the risk of cost overruns more transparent. The day an entrepreneur hits his budget is the day I win the Powerball. Costs can be managed, but not controlled. In response to this, Backflip offered a fair and reasonable response:

“Backflip remains closely involved throughout construction. We provide 100% equity to finance the renovation of almost all of our members’ projects. Progress inspections are carried out using a smartphone camera, which facilitates the rapid disbursement of funds so that transactions can be paid out quickly. While rehab design and budgeting remains an important part of contractors’ duties today, Backflip builds a proprietary dataset to inform cost assumptions and even projected cost return at the submarket level.

I recognize that.

Backflip’s intent remains transparent, and its functionality, integrated lending, hands-on monitoring, and management expertise speak for themselves. This is a great overlap of fintech ingenuity and its target market’s desire to be part of the real estate industry.

Do you 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 a range of commercial real estate companies build their online presence and analyze internal software decisions. He now assists agents with technology decisions and marketing by reviewing software and technology for Inman.