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T

How do you feel about "house flipping" and the people who did/do it?

OK, a little history and then I'll explain the question better. My wife and I are travel nurses. We take assignments in areas we are considering living in. Sometime around the end of 09/beginning of 10, we will have a better idea of where we'd like to settle down in and we will buy a house. As we go around the country, I have a few realtives/friends back home who I keep in touch with for info. on the housing market. When I like a place, I give them a ring and they research the place from their desk/home in PA. One thing they look for is the presence of "house flippers". They have a few things they look at that tell them if there is heavy house flipping activity in the area. If there is, we wont live there, or we will be very carefull not to look at houses beig sold by house flippers.For those who are not familiar with the term, a house flipper buys homes/property and resells it at a higher cost to someone who desperately wants it.
T:

OK, ran out of space.

Anyway, house flippers make a profit by driving up the cost of homes on the everday worker, people like you and I. They buy a home worth 175K, change the drapes over the windows and resell the home for 210K.
Now with the housing crisis going on, a lot of these people are stuck with the properties they cant sell. Some are going bankrupt and are close to forclosure on their personal home.
I say, "Good for them". I think they had more to do with the state of the economy than any other group including Gov., banks and debtors. They made everyday workers overpay for housing and lived fat cat lives off the profits. Now they are suffering for it. I have no sympathy for them.
Saw a show in 60 minutes that highlighted a woman who had 5 properties that were all about to forclose and she couldnt sell any of them even though she was offering them for MUCH less than she had bought them for. Hey, what goes around comes around. And then these people cry foul. Bah.

Trish:

This question has been identified as conversational. To avoid the possibility of having conversational questions removed from the site they need to be tagged: conversational. Enforcement will begin Jan. 5, 2009. To learn more about conversational questions refer to this blog: http://liveqna.spaces.live.com/blog/cns!2933A3E375F68349!1982.entry.

T:

Again QnA team, no more posting in my threads. Geez, did one of you get bored or something.

And again, you are wrong. This is not "conversational". Economics and home ownership are core issues in the U.S. right now. Knowing about house flippers, whether or not to avoid houses owned by them, is not simply "conversational".
Again, please dont post in my threads. Maybe a board game in the office or something to entertain yourself next time.

Albert Page:

You know - I am drawn on Mike. I do buy and sell things pretty regularly. For instance I traded a 2002 Toyota Corolla for a 30' RV this recently. The guy also gave me $1300 cash. The deal was roughly even. Then I sold the RV for $3400 to a guy in Tampa. Which was about $400 less than the RV was worth on the books. (Keep in mind though that RV's seem to work differently on pricing. Where people won't pay more than a car is worth - RV's seem to be different than that.)

So off the Toyota - which was roughly worth about $3800 - I made really $4700 when it was all said and done. I have a principal though to my dealings. I will only buy or trade for things below their worth - and will not sell them above what they are worth.

Like say some old person down here dies and their 96 Cadillac DeVille goes on sale through an Estate for$1900 or something. I will go look at it and see if it is in good condition and figure what it is worth. I'll offer around $1300 or so for it. Then I'll sell it or trade it later at about $3600. Even though it is worth upwards to $5,000 in Good Condition.

I don't want to screw people. I just want to make money - and then let somebody else have the stuff for a good price.

So the way I do it - I see nothing wrong with buying and selling or trading and stuff.

However, i do know tons of people down here in SW Florida that would get a house super cheap and then practically triple the price on the market. To me - that is just worthless. It is taking advantage of people - it causes a false worth of a neighborhood - and it essentially sets people up to fail in the long term.

To be honest though - I think if I had the money or something higher in value to trade (give me time...lol) I'd be able to buy houses super cheap - and sell them below market value. Which makes more sense. Because then the buyer gets a great deal - and you make s

Albert Page:

Err - I am not drawn on you. I am drawn on the issue being discussed Mike. :)
And as an example on my proposal on the housing market. Get this. There are fabricated homes and mobile homes down here that easily sell for $5,000. Mainly because the person is too old to live there anymore or they die. All the other ones in the neighborhood will be selling on the market for around $30-50,000 dollars. Someone could easily buy one - fix it up really nice and sell it $10,000 below market value and still make a decent amount of money.

Nobody does that though. They want to make as much as they can in one swing and screw people over in the process. That makes me sick.

T:

Ah, I think people of your kind are a rare breed. Moving in a an ideal time, taking something off the seller's hands who probably doesnt want to be bothered looking for a good sale (like with your passed away guy and his car), and then reselling it at a fair price.
I dont think thats how house flippers work. At least thats not my understanding of it is. I see them as, oh, trying to sell at home worth 175K for 200K. Those are the one's I have no love for. More than one place I've stayed at, I called to get info on, and the answer was "Dont live there, its polluted with flippers."

If two middle aged, experienced nurses were close to moving in to your neighborhood, and didnt for this reason, wouldnt it bother you? IDK, maybe I overstate my importance to the community. Who would you rather have down the road from you, us or the house flipper?
They just annoy me. IDK why they do to this level.

Albert Page:

Like I said - I do this with the intention of not screwing people over. I know that is rare. That is unheard of. I don't flip houses though - but I'll flip anything within my budget. lol But my first and foremost rule is that I will never sell anything for what it is worth or more. I can make money - and still provide people with really great deals on things. That makes me feel good.

House flippers here in Florida make me sick. Short Sales to even just ARM loans make me want to throw up. All of this is the epitome of greed. And it stands against what makes a community and society work.

To be completely honest - I'd rather be in Ohio. This place sucks. Where I use to live - in Whitehall, Ohio (A suburb of Columbus) everyone knew each other. We were all friends, we watched out for each other, helped each other, etc, etc. I really like that type of atmosphere. My neighbor was an older black lady named Chris. She used to cook me dinner. lol Down here? yeah right.

T:

Ah. I'm trying to turn my wife on to considering Ohio as our place to settle down in. I love Cedar Point. I like the Indians a lot more than the Pirates too lmao.

Albert Page:

Columbus is a great place. It is only about two hours from Cedar Point and from Kings Island. Here read this - then have your wife read it. Then adopt me and take me with you guys. lol
http://en.wikipedia.org/wiki/Columbus,_Ohio

T:

You can only live with us if you know landscaping. I need someone to help me put together my yard once I buy a house.

Albert Page:

Hmmm. Does your wife have a sister? lol Then I can hook up with her - put her to work in the yard and life'll be good. :)

T:

Ewwww. My wife's sister is.............lets just say I'd really have to hate you. Girls like her make people turn gay (and in the imortal words of Seinfeld, "Not that there is anything wrong with that.")

Albert Page:

Hmmm. Okay skip that idea. The last thing I intend to do is move back to Ohio and coming back with my tail between my legs....as a gay man. Not that there is anything wrong with that.

Lyinn:

Caveat Emptor, " Let the buyer beware", a wise decision on your part but let me say that real estate is the absolute best investment in any market. Even in a market such as the present, real estate is a hard asset and while subject to market fluctuations it will never be worth nothing whereas stocks, mutual funds and the like can in some cases rachet down to zero. House flipping unfortunately has attracted some unsavory people looking to make a quick buck. For the wise investor and this applies to house hunters as well there are properties out there that require little improving but because of circumstance sell below the market. One can become an investor while enjoying a nice place to live. This arrangement works well for young professionals particularly with transient employment situations. You can find the type of properties that I'm talking about through your bank and reputable realtors.

T:

I just want to pay a fair price. I even expect to overpay a little. Its the ones who put expensive drapes over the windows then charge 225K for a 160K house that I want to avoid.

Gbob_north:

I think that if people can afford the prices, then it's fine, but if people get loans to pay more than they can pay, they would be the ticking timebombs of the financial world...

Gbob_north:

If nobody got loans they couldn't pay back, house flipping wouldn't work in most areas.

T:

Excellent point. Yeah, the business wouldnt be able to survive if people made better decisions. Ah well.

David:

I don’t consider flippers any different than developers or general contractors. There are good ones and there are bad ones. You should always be cautious regardless of whether the house was flipped or not. Always get or do a home inspection (even on a new house). Check with the local department of building and get a list of all permits that have been pulled on the house. Any work done on the house that does not have a matching permit should be considered a red flag. Any notes on the permit other than “OK” or “PASSED” should be considered a red flag. If you find a place you like, go around and talk to the people in the neighborhood. If it is a flipped house, they will probably know it and it is also a good possibility that their houses were built by the same developer so they will more than likely tell you if they have had any issues with their property.

T:

You sound like you know a thing or two about home buying. I'm trying to learn. Got the audio book "Complete Idiots guide to home buying" and listen to it all the time. I heard a lot of things like what you are saying in that. Yeah, I guess a house is not bad simply because its flipped. Maybe the flipper isnt trying to beat me. My instincts tell me they are though.

David:

No, but I did stay at a Holiday Inn (sorry, I could not resist). I know construction from the inside-out due to my profession (part of what I do is install structured cabling). I have installed cabling in new construction as well as rework (the oldest building I wire was 150 years old). I also have as clients, a design/build firm, a structural engineer, and a realtor so I am also know it by association. I am a homeowner and a DIYer.

David:

Some of the contractors that I have worked with are in it just for the money but many are in it for the joy and satisfaction they get from building something with their own hands. If you look closely at their work you can tell which one takes pride in their work and which one just collects a paycheck. When you shop around, pay close attention to the details, like are the walls plumb, are they wavy; can you see where the screws or nails are? Check out the trim work; are the corners tight or are they caulked; does the trim fit flush with the wall; do the windows operate easily; are they drafty; do all the doors open smoothly; is the reveal even all the way around the door? Pay close attention to wet areas such as the kitchen and bathrooms. Check the tub to see if it has moved away from the wall finish; look under the sinks to check for leakage; check all the plumbing to and from a fixture to check for leaks.

David:

Don’t be afraid to check out the house. Climb around the attic, crawl into the crawl space. Take a screwdriver or an awl and poke around on sole plates, floor joists or any exposed wooden structure members. Poke around the mechanicals like the furnace and water heater. Look at the joints where the plumbing enters and exits the mechanicals. Look for plumb and level. Look for rust. Reach up and palpate the furnace’s duct work and make sure it is secure.

The more you expose yourself to houses the easier it will be to recognize what is right and what needs work.

T:

Ah, I need to write this stuff down. Thanks for answering Jerry. All good stuff that I bet most people dont do. The book I'm reading on first time house buying says take advantage of your time in the home and look things over, dont be taken in by new drapes or carpet.

David:

You're welcome and best of luck to you and your wife!

Ika:

Settle in Florida. There's lots of houses to choose from here. It's definitely a buyer's market!

T:

EEEkkkk. Florida is not a good place for nurses to practice. Not good at all. Besides, I like cool weather........PA, Maine, Minnesota, WA. Although being in Florida I bet I'd lose some weight.

________________________:

If you like the Northeast USA, come to Vermont. It's beautiful here, we have many good hospitals, and the main one is affiliated with the University of Vermont School of Medicine. They are always looking for health care workers here and the housing is like everywhere else, buyer's market right about now.

T:

My wife has mentioned Vermont as a place to consider before. I bet the housing costs are better than WA. More like PA I'm guessing. I might like that.

Jim D:

Interesting question, michael,
My friend has bought 3 houses and one large warehouse building. He stores boats and summer cars in it, for people That keeps his payments to almost nothing out to pocket. He also gets people who will take care of the property and they are almost as good as they were when the people moved in.
He isn't house flipping, he is trying to get enough tenants in his houses who will basically buy the house for him. He is basically preparing to retire early... and his houses will do that for him.
They all are older homes, but in fairly good shape.

T:

Doesnt sound like flipping to me, but I'm not an expert. Economics and real estate are not my field. IDK, house flippers just annoy me to no end. Guess the people who fall for it and let them drive prices up are to blame too.

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