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There should be a law or penalty against flipping houses.
Houses should be for living in and not for exploiting for profit and driving up prices.
If you buy a house without any intention of living in it or renting it, you should get a huge tax when selling in a short time.
People who buy rundown houses that need huge repairs/remodels that nobody else wants or don't have the knowledge to fix or have the time to fix are certainly entitled to make a profit when they've made it habitable again.
People who buy rundown houses that need huge repairs/remodels that nobody else wants or don't have the knowledge to fix or have the time to fix are certainly entitled to make a profit when they've made it habitable again.
I agree, and I have no criticism at all of people who earnestly rehab houses to give them new life and bring them up in value. It's an honorable way for people with good construction skills to make a living and provide a service to the community.
But "flipping," as it is commonly used, denotes something else again, something not so honorable, which is why it is so quickly criticized. Buying a house that is valued under market because it has out of date style points... faded wallpaper, tired kitchen and bathroom cabinets, colors and design elements that nobody likes any more... and then quickly slapping on some fresh paint, and a few of today's cliches, such as granite counters, before "flipping" it back on the market at a greatly jacked up price... it's that sense of an opportunistic speculator, creating a false sense of value, that denotes what many consider flipping. And it's the last thing needed in a market where prices are already high.
But "flipping," as it is commonly used, denotes something else again, something not so honorable, which is why it is so quickly criticized. Buying a house that is valued under market because it has out of date style points... faded wallpaper, tired kitchen and bathroom cabinets, colors and design elements that nobody likes any more... and then quickly slapping on some fresh paint, and a few of today's cliches, such as granite counters, before "flipping" it back on the market at a greatly jacked up price... it's that sense of an opportunistic speculator, creating a false sense of value, that denotes what many consider flipping. And it's the last thing needed in a market where prices are already high.
Strictly remodeling - and only remodeling of paint, carpet, and cabinets - would very rarely provide a sufficient return on investment (let alone, a greatly jacked up price), especially when one considers the cost and fees to acquire the house, the fees to sell the house, and tax considerations.
There should be a law or penalty against flipping houses.
Houses should be for living in and not for exploiting for profit and driving up prices.
If you buy a house without any intention of living in it or renting it, you should get a huge tax when selling in a short time.
I do not think the sellers are the ones dictating the prices at all. There are high prices because there are buyers willing to pay them. The true flippers actually add value to the neighborhoods by fixing up the houses.
I do not think the sellers are the ones dictating the prices at all. There are high prices because there are buyers willing to pay them. The true flippers actually add value to the neighborhoods by fixing up the houses.
I disagree. People who actually rehab houses... replacing worn out components, like outdated wiring or worn out plumbing fixtures, leaky windows, and the like; maybe adding upgrades like bumping out a kitchen to a larger size or adding a covered lanai, are creating actual value, and do deserve a reasonable return for all their efforts.
But flippers are more concerned with just sucking value out of a changing market by slapping on a surface treatment that makes a quick sale at a jacked up price possible. Hence the name, "flippers," which connotes a quick action, without a lot of effort.
I do not think the sellers are the ones dictating the prices at all. There are high prices because there are buyers willing to pay them. The true flippers actually add value to the neighborhoods by fixing up the houses.
Agreed.
If the original seller never bothered to either update or keep up the property, then the "flipper" has done the local neighborhood a favor by making the house presentable again.
In reality, would you rather the house continue to be in a state of decay, or repaired/fixed back up?
If people like what the "flipper" did to the house, they will pay for it and the property taxes collected on that property go up. What is not to like?
Well, a flipper is better than a falling down decayed house, but flippers don't always renovate with the local community in mind. If they can get more money to renovate for zombies, then they renovate for zombies. If you can get a flipper that is sensitive to how things are done then it should work out. The poor mainland fellow who came and tried to flip near me overbuilt for the neighborhood to some extent as well as over paid to begin with.
I was out checking selections on a clients small house (normally I just make the drawings and let them run around picking the counter tops, paint colors and such but this is a special client) anyway, I was surprised to find that granite counter tops were actually one of the cheaper choices. So the flippers putting in granite counter tops might be doing a cheap renovation.
Which is another complaint about flippers, when ever you do something merely for money, you don't get a good product. Doesn't matter whether it's yogurt or house renovations, any time you do anything purely for money you are going to get a very inferior product.
Which is another complaint about flippers, when ever you do something merely for money, you don't get a good product. Doesn't matter whether it's yogurt or house renovations, any time you do anything purely for money you are going to get a very inferior product.
Exactly my point. Over the years I've known several people with construction skills who would buy a house "with potential," and live in it while they did renovations, typically doing the work when they had downtime from their regular trade business. So it was a way to avoid killing time. Then once they had the house really well done, they'd sell it and move on to the next. And because they were essentially rebuilding the house for themselves the end quality was superb, and they got top dollar when they sold. There was integrity to what they did, and they deserved to be well paid for their work and for all the rest that was involved, including the cost of financing and fees and commissions, etc.
I've also known several who have bought houses to rehab on spec, and then worked on them full time to get them ready for market, but their eye were always on the integrity of the work, and on providing genuine value for the eventual buyer. And again, they deserved to be well paid for the quality of their work, and to get a reasonable return on their investment.
But neither of those types are what I would call "flippers." To me flippers are the parasites, the opportunistic speculators who swoop into changing neighborhoods and buy properties as cheap as they can, spend the least they can to make the house look good to buyers, sell as quick as they can, and then move on to the next. They favor splash over substance. And what they tend to do is raise the prices in a neighborhood without raising intrinsic value. They are merely flipping property, not improving it. Even their name is kind of creepy.
I have a friend who rented her house in a changing neighborhood from an old lady for a number of years, and had talked to the owner about buying the house from her. They finally reached a deal they were both happy with, and my friend was getting the financing lined up, when a "flipper" started working the neighborhood... an attorney who could pay cash and then send in a crew of cheap workers to paint everything in sight and make some surface repairs, then push it back onto the market as quickly as possible, jacking the price up to top of market.. and he "stole" the house out from under her, and immediately evicted her, despite verbal assurances to the old lady that he wouldn't do that. And then he proceeded to infuriate all the neighbors with insensitive and arrogant actions, like ripping the roof off while my friend was still in the house, having crews start work at 7am on Sunday morning, etc.
I don't know exactly what happened, but karma finally ran over this dog. Some kinda combination of getting over-extended, taking too many cheapcuts on the construction work, cheating his workers, and upsetting the neighborhood, and next thing he knew he had a Stop Work notice on the house which he never recovered from. From what I've heard it's now 2 1/2 years later and the place is boarded up and facing condemnation. The flipper got himself flipped. Warms my heart to hear it.
I don't know exactly what happened, but karma finally ran over this dog. Some kinda combination of getting over-extended, taking too many cheapcuts on the construction work, cheating his workers, and upsetting the neighborhood, and next thing he knew he had a Stop Work notice on the house which he never recovered from. From what I've heard it's now 2 1/2 years later and the place is boarded up and facing condemnation. The flipper got himself flipped.
Even in your description - the remodel only "flipper" couldn't make money - that's because simply remodeling with carpet, paint, appliances, fixtures - is a money losing proposition unless there are other mitigating factors in conjunction with a hot real estate market which wouldn't have mattered much anyway if they did the remodel.
I agree, and I have no criticism at all of people who earnestly rehab houses to give them new life and bring them up in value. It's an honorable way for people with good construction skills to make a living and provide a service to the community.
But "flipping," as it is commonly used, denotes something else again, something not so honorable, which is why it is so quickly criticized. Buying a house that is valued under market because it has out of date style points... faded wallpaper, tired kitchen and bathroom cabinets, colors and design elements that nobody likes any more... and then quickly slapping on some fresh paint, and a few of today's cliches, such as granite counters, before "flipping" it back on the market at a greatly jacked up price... it's that sense of an opportunistic speculator, creating a false sense of value, that denotes what many consider flipping. And it's the last thing needed in a market where prices are already high.
Nothing forces people to buy the flipped house. Very often, people will see the outdated house for sale and pass it up. They won't want it. Then they see the flip house and it will sell quickly.
I don't understand how people can blame a flipper for updating a house and making it appealing to people. Obviously the people who pass on the fixer and buy the flipper must see some value in it and that's why they are willing to pay the higher prices.
If people stopped buying the flipped houses, flippers would stop flipping. And if people don't want to pay the higher prices for a flipped house, they can simply get themselves pre-approved for a mortgage and go out there and find a fixer, purchase it themselves and updated it themselves.
But to imply flippers are taking advantage of people is a stretch in my opinion. Buyers can choose to buy a flip house or not buy a flip house. And Buyers need to be aware of value and decide if they are paying too much or not for a house.
Truth is, most people who buy a "fixer" house never fix it. They buy it because it is priced low and then they don't have the cash or the time/interest after the purchase to improve the property. So it stays a fixer. At least the flip house has been made attractive and they buyer wraps up the cost in the loan so it doesn't cost a lot more in monthly payment and the place looks better ... vs always remaining an ugly duckling.
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