[Cold Warrior]

Originally Posted by logline

This part of your analysis doesn't ring true for me. Why would a buyer willingly pay $160k (or even $150k) for something he can get for $120k doing the reno himself and choosing his own preferences in style/colors/materials/etc? That makes no sense to me. Everybody else is making a profit off the stupidity of the end buyer in your scenario, but that's not efficient market dynamics.

Did you buy a car or did you make it yourself?

[EA]

Originally Posted by Cold Warrior

Did you buy a car or did you make it yourself?

I like to build my own.

[AA702]

Originally Posted by EA

I like to build my own.

Havent seen a cresida in a long time. My dad use to own a Toyota Corona when i was a kid. Love the vintage toyota cars and trucks.

[EA]

I've had 4 Cressidas now. 3 different body styles.

[SportyandMisty]

Originally Posted by logline

This part of your analysis doesn't ring true for me. Why would a buyer willingly pay $160k (or even $150k) for something he can get for $120k doing the reno himself and choosing his own preferences in style/colors/materials/etc?

This is true for most every product around -- why pay someone to change your oil when you can do it yourself? Why pay someone to repair the transmission in your car when you can do it yourself? why buy a computer when you can build one yourself? or a washing machine? or a bicycle?

In the case of my hypothetical house, the following could be considered very rational reasons:

1) Grandma can't live by herself anymore, and I need to take her in now (or within 45 days)
2) Need a house now because wife is pregnant and husband is deploying to Afghanistan in 2 months
3) The flipper hired a designer who did a very, very good job with style/colors/materials and it it really appeals to the couple
4) The buyer is partially disabled and cannot do any improvements herself
5) The flipper's house is directly across the street from the buyer's in-laws who have volunteered to provide "free" day care to the children
6) The buyer previously attempted to remodel/renew/improve a house, and convinced himself he did not have the skills to do it correctly. In fact, that attempt was a disaster.

etc etc etc.

Originally Posted by logline

...That makes no sense to me. Everybody else is making a profit off the stupidity of the end buyer in your scenario, but that's not efficient market dynamics.

In the case of a willing flipper and the willing buyer, by definition it makes sense. Each is better off.

From your comment, it would NOT make sense for you -- but hypothetically you might personally walk into an open house just for grins, look around, and say to yourself, "gee, I would buy this house for $150K" and discover the flipper was going through a divorce & was eager to unload the property at the first reasonable offer north of $100K... Would you buy it? Perhaps you would say to yourself it is too good a deal to pass up.

I think where you and I disagree is when you say:

Everybody else is making a profit off the stupidity of the end buyer in your scenario, but that's not efficient market dynamics.

What you are really saying is that you believe the buyer could indeed do all the work/pay for the work and come out ahead. That is based on your own knowledge and skills and assessment of risk. The buyer may have a very different assessment.

Moreover, the buyer may say to himself, "I could probably do this... but instead I'll spend my time doing what I do best (making money) and let someone else build houses."

[GinaWeenie]

Flipping is a very offensive word. To dolphins and filiipiianos!

[Raiderman]

Originally Posted by EA

I've had 4 Cressidas now. 3 different body styles.

Not to date myself, but when I started in the car business, my 2nd sale was a brand new Cressida. My first was a teal Paseo

[BBMW]

Since this has now become the official Cressida forum, my father had one, which he then gave to my mother. I drove it a fair amount. It was a car that was both stodgy, and kind of interesting at the same time.

[logline]

Originally Posted by Cold Warrior

Did you buy a car or did you make it yourself?

Bad analogy. Apples and oranges.

If there was an entire market of licensed "personal car builders" who make cars to your exact specifications and did so cheaper than the big automakers, you'd have a point. But alas, there isn't.

[logline]

Originally Posted by SportyandMisty

This is true for most every product around -- why pay someone to change your oil when you can do it yourself? Why pay someone to repair the transmission in your car when you can do it yourself? why buy a computer when you can build one yourself? or a washing machine? or a bicycle?

In the case of my hypothetical house, the following could be considered very rational reasons:

1) Grandma can't live by herself anymore, and I need to take her in now (or within 45 days)
2) Need a house now because wife is pregnant and husband is deploying to Afghanistan in 2 months
3) The flipper hired a designer who did a very, very good job with style/colors/materials and it it really appeals to the couple
4) The buyer is partially disabled and cannot do any improvements herself
5) The flipper's house is directly across the street from the buyer's in-laws who have volunteered to provide "free" day care to the children
6) The buyer previously attempted to remodel/renew/improve a house, and convinced himself he did not have the skills to do it correctly. In fact, that attempt was a disaster.

etc etc etc.





In the case of a willing flipper and the willing buyer, by definition it makes sense. Each is better off.

From your comment, it would NOT make sense for you -- but hypothetically you might personally walk into an open house just for grins, look around, and say to yourself, "gee, I would buy this house for $150K" and discover the flipper was going through a divorce & was eager to unload the property at the first reasonable offer north of $100K... Would you buy it? Perhaps you would say to yourself it is too good a deal to pass up.

I think where you and I disagree is when you say:



What you are really saying is that you believe the buyer could indeed do all the work/pay for the work and come out ahead. That is based on your own knowledge and skills and assessment of risk. The buyer may have a very different assessment.

Moreover, the buyer may say to himself, "I could probably do this... but instead I'll spend my time doing what I do best (making money) and let someone else build houses."

None of this STILL makes any sense if a buyer can simply hire out all the reno work to a contractor and still come out ahead instead of paying a premium to a flipper who will charge you for all the exact same costs PLUS a profit. No expertise or experience necessary.

Okay, I'll concede the rare "time constraint" scenario in your example #1 above, but let's face it, it's much cheaper for people to just hire it out and pay much less... getting EXACTLY what they want at the same time.