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Old 05-06-2013, 11:20 AM
 
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flippers ruin the market for people who actually want to buy and live in their home for an extended period of time
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Old 05-06-2013, 11:37 AM
 
Location: 92037
4,630 posts, read 10,237,057 times
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Quote:
Originally Posted by GMUAlum08 View Post
flippers ruin the market for people who actually want to buy and live in their home for an extended period of time
So if they flip the house to resell it and update it, how is that ruining the market?
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Old 05-06-2013, 11:52 AM
 
Location: Santaluz - San Diego, CA
4,498 posts, read 9,353,886 times
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Quote:
Originally Posted by GMUAlum08 View Post
flippers ruin the market for people who actually want to buy and live in their home for an extended period of time
Again, totally disagree. How do they "ruin the market"? That's like saying day traders of Apple stock ruin the stock market for long-term holders of the stock. Sure, they can cause it to go up or down. But prices of commodities and various investments are driven by supply and demand. As they should be.

In the example above, when traders drove the price up at Apple to $700, wise investors either dumped or just waited on the sidelines until it came back down. You aren't talking about a long period of time when it was at $700. I bought a ton of Apple stock at $400 a few weeks ago. And today it's at $460.

Even if a flipper doesn't do any renovations or improvements, if they can sell it higher that's their right and if someone is willing to pay higher than the price they paid, it means that is where the market is at. If they can't sell it at a higher price than what they paid, they have to sell it for a lower price and after commissions and fees they lose money. As it should be.

There is no free lunch for them or anyone else including other buyers. The market is what it is. If you feel like it's too expensive, you sit on the sidelines and wait for another down cycle. I always get a kick when people try to blame flippers as if they are doing something wrong or they don't have any risk by doing what they are doing.
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Old 05-06-2013, 12:43 PM
 
Location: San Diego
50,060 posts, read 46,605,276 times
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Quote:
Originally Posted by earlyretirement View Post
Again, totally disagree. How do they "ruin the market"? That's like saying day traders of Apple stock ruin the stock market for long-term holders of the stock. Sure, they can cause it to go up or down. But prices of commodities and various investments are driven by supply and demand. As they should be.

In the example above, when traders drove the price up at Apple to $700, wise investors either dumped or just waited on the sidelines until it came back down. You aren't talking about a long period of time when it was at $700. I bought a ton of Apple stock at $400 a few weeks ago. And today it's at $460.

Even if a flipper doesn't do any renovations or improvements, if they can sell it higher that's their right and if someone is willing to pay higher than the price they paid, it means that is where the market is at. If they can't sell it at a higher price than what they paid, they have to sell it for a lower price and after commissions and fees they lose money. As it should be.

There is no free lunch for them or anyone else including other buyers. The market is what it is. If you feel like it's too expensive, you sit on the sidelines and wait for another down cycle. I always get a kick when people try to blame flippers as if they are doing something wrong or they don't have any risk by doing what they are doing.
I worked with a flipper during that fiasco and we did well early on. I did the renovations and he paid me well. It was a great second income at the time, especially since my wife wasn't working. Well, wife got a job and I started to see the light. I told my buddy to back it down or he's gonna get in trouble. He shifted from SD to Vegas and Phoenix. He "barely" sold one after six months and he tried to flip one more. You guessed it, he ending up eating the last three and pretty much lost all the wealth he obtained during the boon.

Anyway, I was on the sidelines then but this guy got greedy. There is plenty of risk out there.
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Old 05-06-2013, 12:47 PM
 
Location: Santaluz - San Diego, CA
4,498 posts, read 9,353,886 times
Reputation: 2015
Quote:
Originally Posted by 1AngryTaxPayer View Post
I worked with a flipper during that fiasco and we did well early on. I did the renovations and he paid me well. It was a great second income at the time, especially since my wife wasn't working. Well, wife got a job and I started to see the light. I told my buddy to back it down or he's gonna get in trouble. He shifted from SD to Vegas and Phoenix. He "barely" sold one after six months and he tried to flip one more. You guessed it, he ending up eating the last three and pretty much lost all the wealth he obtained during the boon.

Anyway, I was on the sidelines then but this guy got greedy. There is plenty of risk out there.

Absolutely 1ATP. I know people like this that did VERY well during the bubble flipping but the problem is greed like you said. They tried to flip one too many. Or some of them were trying to flip 3 or 4 or 5 or MORE properties at the same time.

But the thing is today's flippers are MUCH different vs. the flippers during the bubble. Back then, many of the flippers didn't have to put hardly any equity down or were getting loans thrown at them. Today's flippers are much more qualified, many paying 100% cash, with high FICO scores.

But even today there is risk. There is NO way in real estate to make "easy money" with no risk at all. Typically the things that produce good solid returns have risk to them. I've been around the block a time or two on hundreds upon hundreds of real estate transactions and there is almost no such thing as "risk free" in the real estate game. Especially flipping.

I've seen friends that bought seemingly GREAT properties for really really cheap. And they were planning on just doing minor and inexpensive renovations only to find out there were SERIOUS problems that cost a ton to fix. These flippers have lots of risk and either they make money for that risk or they lose money when there are unexpected problems. Like I said...no free lunch.
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Old 05-11-2013, 12:14 AM
 
6,438 posts, read 6,871,032 times
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It's not much of a house but it's in a decent area, so it's probably priced as a teardown.
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