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Backflip Helps Real Estate Investors Fund Projects and Flip Houses with Better Tech

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By: Headliners News / May 28, 2024

House flipping might seem glamorous on TV, but in reality, it’s anything but easy. Meet Backflip, a startup on a mission to simplify the process by revolutionizing how real estate investors secure funding for their projects. Founded in 2020, Backflip offers a unique platform that not only facilitates short-term loans but also provides robust tech tools for sourcing, tracking, and evaluating potential investments. Think of it as a blend of Zillow’s insights and Shopify’s user-friendliness.

CEO and co-founder Josh Ernst, a former investment banker and venture capitalist, recognized the challenges facing real estate investors firsthand. Their mission is to help investors source properties, analyze deals, and hopefully make better buying decisions. Backflip’s approach combines financing solutions with comprehensive data analysis to empower investors to navigate the market more effectively.

Despite launching during a period of rising interest rates, Backflip has experienced impressive growth. Revenue soared nearly 5x in 2023, reaching an annualized revenue of $10 million, and the company is now on the brink of profitability. Today, Backflip announced a significant milestone: a $15 million Series A funding round led by FirstMark Capital, with participation from existing investors and angel backers.

Backflip’s success is underscored by its traction in the market. Users analyze an average of $5 billion in properties monthly on the platform, with over 900 homes funded since its launch in mid-2022. The real estate tech platform’s users have realized an average gross profit of $82,000 per property, typically repaying their loans within six months.

The key to Backflip’s appeal lies in its ability to offer flexible financing options tailored to real estate investors’ needs. While most loans are for 12 months, investors have the flexibility to either sell the property or refinance with another lender. Backflip’s streamlined process bypasses the traditional loan application hurdles, making it easier for investors to secure funding and accelerate their projects.

Backflip operates as a marketplace for financial products, earning revenue through a take rate on loan origination. This model enables the company to underwrite properties, assess business plans, and leverage data insights to inform lending decisions.

Adam Nelson, managing director at FirstMark, sees enormous potential in the house flipping market. With over 50% of homes in the US over 40 years old, the demand for renovation and remodeling is substantial. Nelson believes Backflip is poised to become the go-to platform for streamlining fix-and-flip transactions, with the potential to revolutionize the asset class.

As Backflip gears up for its next phase of growth, fueled by its latest funding round, the startup remains committed to empowering real estate investors with innovative financing solutions and cutting-edge technology. With headquarters in Dallas and Denver, Backflip is well-positioned to drive positive change in the house flipping industry.

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