Real estate observers say that house flipping, which declined after the financial crisis in 2008, is on the rise again, thanks to low interest rates and rising home prices.

Last year, 5.7 percent of all home sales were flips, the highest level since 2006, according to Attom Data Solutions.

The trend is attracting the interest of Wall Street: Last week, Goldman Sachs bought Genesis Capital, a leading lender to house flippers. The strategy requires fast access to money from developers who are willing to pay higher interest rates to get it. The loans are backed by the property typically run for a year or less.

For the lenders, the loaned funds to flippers offer reliable returns of about 8 percent from borrowers who must meet minimum investments, generally $100,000. The loans come with risks, however, including developers unable to pay them back and a drop in real estate prices that could make properties hard to sell or even rent.

Investors say hard-money loans are more stable than a bank mortgage because they're secured by properties at a lower loan-to-value ratio, a risk assessment used by lenders. Hard-money lenders boast of the speed in which they finance loans, typically in less than a week, compared with several months for a traditional bank.

For the smaller builders and house flippers who rely on these loans to do business, the speed with which these lenders can have the money ready trumps the high interest rates they charge.