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Old 12-29-2021, 01:56 AM
 
1,085 posts, read 441,687 times
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I have been watching a lot of house flipping shows lately, and researched online. People say its taking out affordable starter homes for families, and with flipped houses selling for more, it makes real estate more expensive for all the neighborhoods it was sold at. Many homes that I watched were liveable, and doesn't need the kitchens and bathrooms to be torn down. Some family out there don't mind living in a house built in the 80s.

But on the other hand, what I noticed is that when a house flipper does his work, buying and selling will make RE agents get jobs, contractors, cleaners get work, home depot sells materials so their workers are getting work, and the material that's being made from whichever factory, gets work, on top of truckers transporting the materials. It's a system that employs alot of people when a flip goes on. In the end the flipper gets a profit, and many people get jobs. The person paying for all of this is the home buyer, usually 120-150K more in price compared to the house that was untouched (at least from what I saw on TV, average profit was 50K, spending 60K average for expenses, and the rest is agent fees)

So the big question is, is flipping good or bad once everything is factored in?
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Old 12-29-2021, 04:31 AM
 
Location: The Triad
34,088 posts, read 82,920,234 times
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Quote:
Originally Posted by accord2008 View Post
So the big question is, is flipping good or bad once everything is factored in?
As it has come to be practiced... it is VERY bad.
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Old 12-29-2021, 07:00 AM
 
Location: Columbia, SC
10,966 posts, read 21,972,507 times
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Good. It does create work, but more importantly, and I think people overlook this, is it creates more livable housing. Those homes are "affordable" becuase of the condition. I haven't met too many people over the years that are buying a primary residence that have the ability (capital) and the desire (time) to invest in a house in bad condition to rehab it.

Those affordable aren't so affordable anymore when you factor in the cost to rehab it. Everyone always thinks foreclosures are a great deal, but they aren't always such a great deal after all the money gets sunk into repairs. Many times someone could have just ended up buying a move in ready home for a similar price.

There are loan products out there to help with the rehab costs but they are a bit more complicated, usually have higher rates, and sellers don't have to take offers that are complicated right now with the inventory shortage.
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Old 12-29-2021, 07:07 AM
 
4,830 posts, read 3,259,357 times
Reputation: 9445
Quote:
Originally Posted by MrRational View Post
As it has come to be practiced... it is VERY bad.
Agreed. Having lived in two smallish towns with a lot of fantastic old Craftsman era houses, it's sad that unless you have an 'in' on one that hasn't been ruined yet and goes up for sale, rest assured a flipper will snap it up and in six months you'll see the results. Wonderful original woodwork either gone entirely or painted white, walls taken out to make an 'open' floorplan, the cheapest white cabinets they can find (when they even bother to USE cabinets!), grey walls, HORRID modern day tile patterns in the kitchen and bath, and more often than not new vinyl flooring beause using that instead of refinishing the floors saved them a couple thousand dollars.
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Old 12-29-2021, 07:09 AM
 
Location: Dallas/Ft. Worth, TX
3,067 posts, read 8,405,839 times
Reputation: 5714
Quote:
Originally Posted by accord2008 View Post
I have been watching a lot of house flipping shows lately, and researched online. People say its taking out affordable starter homes for families, and with flipped houses selling for more, it makes real estate more expensive for all the neighborhoods it was sold at. Many homes that I watched were liveable, and doesn't need the kitchens and bathrooms to be torn down. Some family out there don't mind living in a house built in the 80s.

But on the other hand, what I noticed is that when a house flipper does his work, buying and selling will make RE agents get jobs, contractors, cleaners get work, home depot sells materials so their workers are getting work, and the material that's being made from whichever factory, gets work, on top of truckers transporting the materials. It's a system that employs alot of people when a flip goes on. In the end the flipper gets a profit, and many people get jobs. The person paying for all of this is the home buyer, usually 120-150K more in price compared to the house that was untouched (at least from what I saw on TV, average profit was 50K, spending 60K average for expenses, and the rest is agent fees)

So the big question is, is flipping good or bad once everything is factored in?

As stated when it is done properly your expectations above are real as far as how it can help.


When it is not done properly the only one that really benefits are the investors that put a lot of nice paint on junk to make it look good.
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Old 12-29-2021, 07:26 AM
 
Location: DFW/Texas
922 posts, read 1,110,715 times
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As someone who was regularly pushed aside by sellers for favor of flippers with suitcases of cash for SEVEN YEARS, my opinion of flippers isn't that great. Does flipping provide jobs to some extent? Sure, I'll concede to that. But does it axe out buyers who are struggling to get into homes that they can afford at the time and then fix up along the way? You betcha. My husband and I made the decision long ago, even before we bought our house, to NEVER sell any home we own to a flipper, regardless if we would make more money. We believe it's more important to give a couple or family looking for a good home a chance to come into their own. The flippers can suck it.
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Old 12-29-2021, 07:38 AM
 
Location: Rochester, WA
14,458 posts, read 12,081,453 times
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Mostly good. Flippers often take homes that are not in livable condition that would not qualify for financing, and they fix the major items to make them available for first time or other financed homebuyers. That’s a valuable service.
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Old 12-29-2021, 07:46 AM
 
Location: Virginia
10,089 posts, read 6,420,662 times
Reputation: 27653
Quote:
Originally Posted by escanlan View Post
As stated when it is done properly your expectations above are real as far as how it can help.


When it is not done properly the only one that really benefits are the investors that put a lot of nice paint on junk to make it look good.
That's my objection to house "flipping'. Too many flippers (in fact, I would hazard to say the majority) put their money into cosmetic upgrades for the flip like new carpet, laminate floors, granite counters, SS appliances, etc. while leaving older plumbing, poor yard drainage, old or installing the cheapest HVAC systems, old wiring, etc. The problem arises when first time home buyers, in particular, are dazzled by the shiny new "upgrades" but in a few years are strapped by major investments in basic infrastructure fixes or replacements. I would much rather buy a home with a new roof, heating and cooling system, water heater, gutters and downspouts, and good drainage but needing cosmetic upgrades that I could do to my taste and at my own pace and budget.
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Old 12-29-2021, 07:58 AM
 
Location: Rochester, WA
14,458 posts, read 12,081,453 times
Reputation: 38970
The issues above here why it pays to have a experienced agent and a good inspector to help see you through some of those issues first time homebuyers might miss or be unprepared for.

I too look for the big ticket livability issues like new roofs, new siding, new wiring panels, new plumbing and actually new paint that are often the things that will make it fail financing.
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Old 12-29-2021, 08:17 AM
 
Location: NC
9,358 posts, read 14,085,892 times
Reputation: 20913
Sometimes flippers are correcting the lack of home maintenance and thus are preserving the homes. That’s good. Other times they are changing the style and finishes simply to attract people who want updates but don’t want to go through the process themselves or pay up front rather than roll the costs into their mortgage.

When housing supply is constricted like 2021 then flippers might make a large profit thus reserving that potential for themselves rather than the new homeowner. But, they may have also had to pay a premium for that decaying house and not make a huge percentage.

The real negative is when they do a superficial job and cover up true faults such that the new owner pays a lot but is buying future problems.
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