Easy-Money Loans Backfire on Rookie Home Flippers Seeking Riches

Dave Diaz notices the telltale signs when he pulls up to the house in his GMC pickup. A soggy work permit rots in a display case. A coffee cup and a Pepsi can sit on a wall, abandoned, as if workers had fled to find cover in a storm. The home, like one every block or two in this Southwest Florida neighborhood called Gator Circle, is unfinished.

Diaz, a builder, works here in Cape Coral, a city of 230,000 with a once-hot real estate market that’s gone cold. Cheap financing and a burst of real estate buying during the Covid ...