patrick.net

Hugolas_Madurez says

What I don't understand is spending the money and time on "renovating" the flip. If market goes up you'll make your money regardless, and if it goes down you shouln't be flipping in the first place.

Some of the flipper houses are pretty "rough" and in need of serious work. This is especially true of foreclosures, where the previous owner knows they will be losing the house and so takes no care at all and/or actually rips the house to shreds out of spite.

One problem could be financing. Already-completed upgrades to the house can be used as collateral; future repairs require payment and completion before they can be used to back a loan. Cash-strapped buyers might qualify for a loan on a house priced $200k higher if it assess for that higher amount and is habitable. But if they buy a house in need of fixing, they won't necessarily qualify for a $100k home improvement loan (on top of the lower-priced house), especially if they won't be able to live in the house until the fixes are made. They could be stuck paying rent (in their old place) plus paying a mortgage (on the new place) plus paying for repairs on the new place.

Another is risk tolerance. The flipper is taking a risk that the repairs will go as planned. Flippers hire shady contractors and other workers. No permits, no legal work contract, "undocumented" workers, etc. Many prospective buyers don't have the knowledge and/or connections and/or risk tolerance for such shenanigans. There might be all sorts of problems with how the plumbing, electrical, foundation, or roof was fixed, but the flippers will be long gone by then. Buyer is buying a (probably false) sense of security.

People purchasing might be on a tight timeline to move in. For example: move before new job starts or school starts so there's no disruption part way through. Or maybe the buyer's current house is about to be sold and they need to move out soon or lose the offer on the sale. If they buy a house that needs extensive work, that will delay moving in or be a real hassle if they have already moved in.

Thanks for all the interesting info! Flippers do take a lot of risks! They have more guts than I do. They say the more the risk, the greater the reward. So go for it :)

I love the comment that Real Estate is largely unregulated. Hard to believe but a great point! It is BUYer Be Careful (the basement may flood and the roof leak).

Ha! I haven't seen any threads about this story in the Mercury News that I totally find hard to believe. So why is this lot empty?!

https://www.mercurynews.com/2019/05/22/its-a-vacant-palo-alto-lot-but-who-can-afford-it/

The darn Merc has a Pay Wall!!! Anyhow, it is a story about a $9 million EMPTY lot near where Steve Jobs used to live in Palo Alto :)

Here's the same story without a PAYWALL https://sanfrancisco.cbslocal.com/2019/05/15/empty-palo-alto-lot-hits-market-for-9-million/

Wonder who first broke the story? Wonder who the buyer will be and will she or he be in a "bidding war?" Stay tuned :)

They add no value. They are the types who basically end up screwing buyers and families by forcing higher pricing. This is pure greed on them.

I think I hate these guys. Fucking assholes. Flippers and realtors should be shot at point blank. Especially any with Realtor(tm) association.

When we decide to sell our CA property here is what listing description will be:

“For sales by owner, to families only, no bidding wars, slightly underpriced to sell fast, first qualified offer will be accepted. investors, bankers, and realtors will be shot on sight.”

FortWayneIndiana says

When we decide to sell our CA property here is what listing description will be:

“For sales by owner, to families only, no bidding wars, slightly underpriced to sell fast, first qualified offer will be accepted. investors, bankers, and realtors will be shot on sight.”

I like that.

FortWayneIndiana says

When we decide to sell our CA property here is what listing description will be:

“For sales by owner, to families only, no bidding wars, slightly underpriced to sell fast, first qualified offer will be accepted. investors, bankers, and realtors will be shot on sight.”

I'd add one more thing: "If you want a buying agent, you pay them out of your own pocket. Figure that into your costs, not mine."