Angel Oak and HouseCanary: Making Real Estate Investment Easier for Everybody

Investing in real estate as a fix-and-flip or buy-and-hold investor has never been more popular, and many people who were working on house flips or fixing up rentals on weekends have turned their hobby into a lucrative full-time job. Apart from the plethora of shows on HGTV, one big reason why real estate investing has become so widespread is due to new loan products that allow small investors to distribute some of the risk — and the reward.

So why are lenders and capital markets players suddenly willing to back these real estate investments? Their risk is multiplied with each loan they approve or buy, and the last thing any real estate investment portfolio needs is a sudden surge in delinquent and foreclosed properties. But new technology products have emerged that help mitigate that risk, giving the lenders, servicers, and capital markets buyers and sellers higher confidence in the real estate assets backing their loans.

Angel Oak Prime Bridge, one thriving member of the Angel Oak family of companies, has been helping investors secure fix-and-flip funding, landlord financing, and rental rehab loans for almost a decade. The company also operates a hedge fund and a mutual fund, and it was the first company to securitize fix-and-flip loans for real estate capital markets.

And Angel Oak Prime Bridge uses HouseCanary home valuation products to help it assess risk and decide whether it’s going to back a loan.

Who are Angel Oak Prime Bridge’s customers?

Angel Oak Prime Bridge works with real estate investors, whether they’re operating full-time or just as a hobby. Quite a few of Angel Oak Prime Bridge’s clients are first-time investors, notes Robert Mulcahy, the SVP of production and strategic initiatives. “We offer a high level of customer service from our trained staff here — giving those investors guidance is key,” he explains.

About one-third of Angel Oak Prime Bridge’s customers are investing in a real estate property in a state where they don’t currently live. This is likely a growing trend as iBuyer companies expand to new markets and solidify their foundations; these are companies with online platforms that allow buyers and sellers to find homes, evaluate them, and even make an offer or list a home immediately, without making a single phone call, photocopy, or office visit. 

The company currently offers loans in 18 states and is rapidly expanding to new markets, and it offers an online portal where investors can check their loan status, and will soon be able to network and ask for advice, around the clock.

How does Angel Oak Prime Bridge evaluate each deal?

“Technology is a big focus for me and for the Angel Oak Prime Bridge platform,” says Mulcahy. “In the lending industry, traditionally and historically it’s been hard to adopt new technologies. It’s like the Titanic — they just can’t move very quickly.” This is a disadvantage in an era of iBuyers, when sellers can get an immediate offer from a digital platform.

By adopting technology, Angel Oak Prime Bridge is able to stay on the cutting edge of the industry, facilitating the speed that clients expect in addition to high-quality, securitizible loans. It needs to specifically understand the after-repair value (ARV) of each property so that everyone involved is confident that they’ll make a profit when the home sells or is rented out. 

“With HouseCanary products, we can look at current local trends and the history as well,” Mulcahy notes. “We can see if this was a market that crashed previously, for example.”

And because Angel Oak Prime Bridge loans tend to close quickly (within about 10 days), speed is critical. “Within three clicks, I can see what the as-is value of the home is, and I can get some other data as to future trends,” he says. “We’re able to then communicate that back to our customers and let them know that, sooner or later, there might be an issue with the value or a problem with the neighborhood.”

Angel Oak Prime Bridge has also utilized broker price opinions (BPOs) and other automated valuation models (AVMs), “but some of those just do not have the same depth of information,” Mulcahy believes.

Understanding each property well when you’re managing a portfolio of thousands is easier with HouseCanary — and whether those loans are being held in your own company’s funds or securitized, it’s critical to produce high-quality, high-performing loans.

“HouseCanary has a richer product and a better understanding of how we use it,” adds Mulcahy. “We have a different business model, and HouseCanary was able to deliver on all my needs.”