I'm in the wrong business.
To: Citizen Zed
2 posted on
03/03/2016 10:29:31 AM PST by
DonaldC
(A nation cannot stand in the absence of religious principle.)
To: Citizen Zed
You missed the money quote
“netting an average $55,000 per sale before renovation and transaction costs”
you have to subtract renovation and transaction costs from that number.
If you spent $50,000 on the remodel and $5,000 on the closing costs, you made nothing.
3 posted on
03/03/2016 10:30:20 AM PST by
TexasFreeper2009
(You can't spell Hillary without using the letters L, I, A, R)
To: Citizen Zed
Buy homes at foreclosure auctions for pennies on the dollar, do some minor repairs, and sell to the next sub-prime buyer for a tidy profit. Or, rent them out for a tidy profit. Wash, rinse, repeat.
This is how it works in real estate.
4 posted on
03/03/2016 10:34:07 AM PST by
factoryrat
(We are the producers, the creators. Grow it, mine it, build it.)
To: Citizen Zed
Oopsie.
Leading indicator of a bubble about to burst.
5 posted on
03/03/2016 10:34:14 AM PST by
Uncle Miltie
(Trump's populisim isn't conservative, but will help destroy the Uniparty. JOIN AND ATTACK!)
To: Citizen Zed
My Grandpa taught me,
“Whenever there is a good margin in a market, too many people will get into it and screw it up.”
6 posted on
03/03/2016 10:46:35 AM PST by
blueunicorn6
("A crack shot and a good dancer")
To: Citizen Zed
Are we in 2006? Let me check my calendar.
To: Citizen Zed
"...$55,000 per sale before renovation and transaction costs..." Well yeah - BEFORE expenses.
They're making it sound like it's all profit, but clearly those costs reduce that $55K significantly... to the point that you've really gotta be watching the pennies to make something. It's certainly not a job for the faint of heart.
14 posted on
03/03/2016 11:05:49 AM PST by
alancarp
(There are not enough laxatives in the world to cure that what ails Democrats.)
To: Citizen Zed
I just bought a house that had been flipped, and sold my old house to a flipper. As far as I'm concerned, both deals were worthwhile. On the purchase side, we bought a house that has been thoroughly renovated, and move-in ready. I don't have to spend my weekends doing odd jobs and projects (at least for now). Everything in the house looks good, and works.
On the selling side, we sold it for less than top dollar, of course, but we don't have to keep putting money into it to get it up to move-in ready condition, and we don't have to wait for an unknown period of time for someone willing to buy a fixer-upper, when there are already a lot of houses on the market.
The popularity of the TV shows have contributed to the availability of flipped houses, and it also brings more investors.
To: Citizen Zed
The report by RealtyTrac found that home flipping in 12 active metropolitan areas last year was above a peak set in 2005, just two years before the U.S. mortgage market started to collapse, leading to a banking crisis and the Great Recession.
Correlation, not causation. If banks are giving out loans that people can't afford, of course those people are going to be buying houses for more than they usually would. House flippers have nothing to do with that.
"These sales artificially inflate home prices, making housing even less affordable for buyers and increasing the risk of a bubble," said Gardener.
What? No, they don't. Conducting repairs and improvements to increase the value of the home isn't artificial. It's a real value increase. And again, the home is only worth what someone is willing to pay for it. If the 'fake value' increased too much, people wouldn't buy these houses and they wouldn't sell. Most home buyers are willing to pay for this. All other factors the same, a 100k home that needs 50K of work isn't nearly as attractive as a 160K home that doesn't need work. Even though it costs 10k less.
It's only (arguably) an artificial inflation of value if they buy the house, don't touch/repair it, and resell it for more. But again, value is relative.
To: Citizen Zed
Flipping usually involves fixing up the house, not merely buying it and signing the sale papers a few days or weeks later. IOW, there is actual improvement of the property, which actually increases its value. It isn’t all fluff...and the people doing this are making money, meaning that they pay more in taxes; they are also buying more materials, increasing profits elsewhere, and they are many times employing people. So why, exactly, is this so bad?
22 posted on
03/03/2016 1:52:09 PM PST by
Ancesthntr
("The right to buy weapons is the right to be free." A. E. van Vogt)
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