patrick.net

Philistine says

The sales clerk running the open house was ranting about how the old bathroom had green-and-white tile with matching green tub/toilet/sink, and I’m just thinking, wow that sounds so much cooler than this granite 12″ tile and poorly-installed white plastic tub

This house sounds like a candidate for a picture on the last page of a magazine I can't think of the title of right now, but it was about architecture or old homes. The last page was called Re-muddling and it always depicted some horrendous or hideous travesty performed upon an old and once-beautiful home and provided sarcastic commentary about it.

CSC says

I also won’t be likely to ever buy a flip. Most of the people doing it either don’t know, or don’t care, how to properly do repairs or upgrades, and most are likely to be overpriced.

There is a lot of truth in this thread about flipped homes. For example - this home right here a few miles outside of Monterey:

http://www.realtor.com/realestateandhomes-detail/473-Forest-Ci_Marina_CA_93933_M21970-66484

It sold a few months ago for around $201k. The buyer put cheap laminate floors in it, and repainted the exterior.... and hiked the price up. It was for sale for around $330k, and now it's down to $309k.

Seriously !!! $100k markup for freaking laminate floors and exterior paint? We're talking 1-2 weekends worth of work with a couple friends and some beer.

I walked through this home a few years ago. It's been vacant for around 3-4 years, had tons of mold/water damage all throughout. No way I would touch it with a ten foot pole. Not to mention, an apartment complex overlooks the backyard: no privacy.

Crap like this deters me from flipped homes as well.

The one thing that bothers me about these fix up flips is, what is it they are covering up? I watched a two story house in my neighborhood that had a mold ring between the first and second floor. Guys came in, ripped a bunch of stuff out of the inside. They apparently "fixed" it up on the inside, but the outside was just painted. The wood siding was all warped and they had the flashing between the first and second floor installed incorrectly. Is an inspection going to uncover this shoddy "repair"? I doubt it. When I see one of these cute "fix-ups" i just wanna run the other way.

seaside says

I’d buy if flippers took care of any possible issues at foundation, plumbing, structure etc and then made things look slick. But then, that’s not flipping. Isn’t it?

I sold the condo I'd lived in for 24 years at 6463 Bordeaux, 75209, in 2005 two months after listing it. The developers who bought it spent the next 6-7 months completely renovating it, including new kitchen and bathroom fixtures. Most significantly, though, they didn't replace the two HVAC units for upstairs and downstairs, which are both mounted in the ceilings and with outdoor units that are now 30 years old--but this was plainly obvious to anyone who looked at it, so they can't be blamed. The most puzzling part of the renovation, though, was the removal of the storm windows which I'd paid $1,500 for in 1983, which included front and back doors which were retained. They not only aided in heating and cooling, but added a measure of security as well. They didn't even replace them with the screens which had been in place originally, but just left unprotected windows! I'll bet they didn't replace the 12 year old electric water heater, either, on which one of the elements had gone to the bad. It took them two years to sell the renovated unit, but it seems to be well maintained by the current owner as I drive by whenever I'm in Dallas.

HousingWatcher says

In my area, flippers usually do a total gut renovation. One flip near me just sold late last year. Bought it for $475,000 in 2005 and just sold for $910,000. Some flippers do care about their work and will put every effort into making sure everything is just right.

Buying in 2005 and selling now isn't exactly a flip. A sale is usually considered a flip if it's a very fast turnover.

VanillaSky says

is my position economically ir-rational? you bet it is.
the rational choice would be to ignore how much the flipper/seller is making.
but i refuse to make a seller happy by cashing out their equity using my own money (which it will be because i plan to pay off the loan). they can find another sucker to do that dirty task.
i’m completely against transferring my wealth to another person because they got lucky with their dumb-luck timing and buying before the bubble.

This doesn't make any sense. I'm upset about the bubble too; and I'm angry that prices are so high because irrational buyers drove prices up while banks were basically writing blank checks. But I don't care who I buy from, or whether or not they profit. All I care is that when I do buy, which is not now, prices will have come back down to appropriate values.

I see it this way: The houses in the areas I'm interested in are way over priced, and I'm not interested in taking on a massive amount of unmanageable debt just to free someone else up from their massive amount of unmanageable debt. When the seller/bank/flipper/whoever is ready to come down and sell a home for a reasonable price I'll make my offer. Until then I just watch and wait.

Shawn says

VanillaSky says
is my position economically ir-rational? you bet it is.

This doesn’t make any sense.

is there an echo in here?

VanillaSky says

Shawn says

VanillaSky says
is my position economically ir-rational? you bet it is.

This doesn’t make any sense.

is there an echo in here?

Fine, I'll take some of the sugar coating off of it.

VanillaSky says

is my position economically ir-rational? you bet it is.

That's because you don't have any sense.

Less of an echo now?

Shawn says

Less of an echo now?

no.

now you're just repeating yourself; as well as repeating what i already said. you're kind of slow.

This argument is silly. The only one your hurting VannillaSky by not buying from someone with lots of equity is yourself. Your drastically limiting your selection of houses and you are ensuring that the home buying process is going to be long, as short sales and REOs usually take forever to buy. And in the new "fraudclosure" erra, buying a foreclosure will only take even longer. Plus you are setting yourself up to overpay for a house, because if there is a bargain in your area and the seller has lots of equity, you plan on not buying that house. An estate sale can ofen be a good bargain, but since the sellers of those houses will usually have 100% equity, I assume you will not consider it.

To be honest, if, or when, you ultimately do buy a house, I do not beleive for a second that you will stick to your promise of not bying from a seller with lots of equity. If you see the right house at the right price, you will buy it, regardless of the equity. Your just trying to stir up a debate.

VanillaSky says

is my position economically ir-rational? you bet it is.

swebb says

So, in 20 years, when you sell your house, you are going to list it for what you paid?

VanillaSky says

of course not. that would be stupid.

buying a house, living there for 20 years is completely different case from someone buying a house, putting on a new coat of paint and trying to pawn it off a week later for 25-50% higher. Thats what he means by the flip.

ChrisLA says

uying a house, living there for 20 years is completely different case from someone buying a house, putting on a new coat of paint and trying to pawn it off a week later for 25-50% higher. Thats what he means by the flip.

Except he explicitly called out "people with hundreds of thousands of dollars of equity" in addition to "flippers". So, in his book, someone who bought in 1995, has paid for 15 years on his mortgage (building equity), and has enjoyed some "reasonable" appreciation (in addition to the big run up and bust) would be off his list, too. That's the point, it's not just the flippers. It's people who stand to walk away from the transaction with significant cash left in their pocket. I get the crap-flipper issue, but this other one doesn't make as much sense to me.

I guess what I am saying would not be understood by someone that disliked what I am saying. Or someone that only understands Hawaiian. Look I added real estate industry to the mix. This is your big break use it. Or remain loyal to the price gougers. You don't want an independent life and want to serve them? Be my guest. Can't figure out what to do for yourself? You got yourself into what you do now and are half way successful. Stop watching TV sitting in your own gravy. Make your way again and be very successful.

My point here is not flips. What the negative people are after here is this: The U.S housing market restarted with all of its very high prices that make people struggle. Having to do nothing short of killing their neighbor for his wallet just to make a house payment.

This is everyones big break large and small. They all had to make house payments. Now is your time with prices sometimes 50 to 65% under market. To get a house and not make horrendous payments. I would not buy now because prices are still going down. It does not even make sense to buy and wind up in negative equity.

Alex Jones made a comment: House prices have dropped in certain areas to 18k. Thats just not good for America. He made a statement something close to that. NOT GOOD FOR AMERICA. Now that guy is a lemming. A lemming can't think for himself. Guy I just set you free. If you know everything about houses and housing nows your time.

Me too. I can see the flip job a mile away. Ugly granite counters, cupboards in some ugly finish and whatever tile Home Depot is selling in a poor layout. After fixing up 3 houses in other states for myself, I refuse stick myself with someone's for-profit renno. The perfect house to buy is the well maintained home that is out-of-date. It is livable as is. Better to spend you money on moving a few walls for superior function and design and forget the expensive house bling ( I've done that too and it's enjoyment is ephemeral).

VanillaSky says

if i buy from a flipper he directly makes profit from the sale.

if i buy from a seller that paid $100k and i buy it for $800k. he directly makes $700k from the sale (minus costs).

in both cases i am directly enriching the seller. i do not want this.
if i buy a short sale, then the seller is losing money on the sale (losing at least the deposit).

if i buy an reo, the seller has lost his home.

i want to buy in this situation because i want the seller to lose.
why is it so hard for people to understand such a simple concept?
p.s. i don’t care about the bank. they always make money on the origination of the loan- only way to circumvent that is to pay all cash.

That is the attitude of a looser, winners want everyone to win. There is enough for everyone. You want to win at someone else's expense, people like you usually don't win and never know why. I feel sorry for you.

ChrisLA says

illustrateth says

I get really frustrated seeing flips that are charging a premium for work that doesn’t make any sense.

It’s very unethical. Flipper are the dirtbags and one of the biggest reasons for the bubble and the crash. They’ll burn in hell.
I wouldn’t buy someones flips either, flips are unethical and screw the buyer. There is a reason bible advises against this behavior, of course we have too many “atheists” who never try to read between the lines to understand what is being shown to them.

So buying low and selling for a higher price is immoral? Isn't that what builders, stores pretty much every viable business in the free world does? If people didn't snap up these flipped homes, then there would be no flippers. Sounds like you would be happier in a Socialist country where there are no evil profits. Most buyers couldn't or wouldn't want to undertake a major renovation and prefer to buy a house that is done. It is not as easy as it looks on TV after all. Didn't know the bible had a chapter on the perils of buying a flipped house. I have heard it has chapters on how to correctly beat your wife. Atheists do not say crazy things like "They will burn in Hell" but that is another topic.

carolinefpf says

That is the attitude of a looser, winners want everyone to win. There is enough for everyone. You want to win at someone else’s expense, people like you usually don’t win and never know why. I feel sorry for you.

i'm set for retirement. care to make any more stupid assumptions?

Don't buy someone's flip sounds reasonable.
The situation now with some over priced areas is that both people and banks are very reluctant or even stubborn to admit
defeat. But if there is still a huge difference between what people can pay (borrow) and the price of the houses, something is going to give. Time will tell.
My friend here is always upset because once upon a time his place was "worth" $1.3 million. Today it's about $500K or so, he paid $400K and did extensive remodeling probably for about $75K. So, he's a little better off than when he bought in 99, but he's not underwater either.
But in Santa Cruz you see more bums, homeless, weirdos, and closing businesses downtown all of the time. There are lots of wealthy students here and many illegal aliens which maintain rents.
He once wanted to sell out at the top, pocket about a million bucks and move to a mellower location, and be similar to a homesteader. He talked about no tax states, e.g. New Hampshire. Or, less taxed states, like maybe N. Carolina?
Anyway, his wife said "NO" so he now sees life ahead of him working forever since he really has no assets. I told him to reverse mortgage his house someday.
Fips are good in dolphin shows and circuses, they cost much less to experience.

VanillaSky says

carolinefpf says

That is the attitude of a looser, winners want everyone to win. There is enough for everyone. You want to win at someone else’s expense, people like you usually don’t win and never know why. I feel sorry for you.

i’m set for retirement. care to make any more stupid assumptions?

Your strategy sounds like those email plans where they want everyone to not buy gas on a certain day. Like that will have an effect on the oil companies. They don't advocate driving less, or buying a more fuel efficient car--just don't buy gas on Tuesday.

Your plan is just dumb.

tatupu70 says

Your plan is just dumb.

which is funny because i've already made my money; unlike you.

VanillaSky says

tatupu70 says

Your plan is just dumb.

which is funny because i’ve already made my money; unlike you.

Huh? What are you talking about? You're getting a little defensive...

Seems to me to be another version of what happened in the GREAT Build up, Flippers will be buying from Flippers, and the GREATER FOOL theory is in action, It will sting many flippers, when they are going to be happy to get out with a loss, then then NEXT one will buy it from that flipper thinking he / she got it even cheaper, and then in two years from that day, sold again for even less to yet another and so it goes until many many amateur flippers are drained and learn the hard lesson that they did not think X could ever happen, Sure many will make good deals, and make money BUT Trend is lower over next 8 years. (give or take 4 )

Win at someone elses expense. I'm all for it. These rippers have been winning at everyone else's expense for years. Everyones tired of it. See even the people that were sort of in on it were trying to survive. Running their chuckles off trying to pay things off also. I feel bad for them in a way also. They see it as culture in a lot of respects. I can see that. The thing here is relax. See. Time is here it seem when your not going to have to run so hard. Do everything you can just to look good. You just may be enabled here to get some really good stuff. Without having to work at paying someone back. Instead of having the asset for yourself to keep. Without fear of having it taken away from you.

Weirdly, since we've started looking at houses, I've noticed the same "landlord special" from Home Cheapo turning up as the "flipper's special." It's like whether you're renting or buying, you can get the same basic treatment by slapping down some Pergo, putting in some pseudo-Tuscan wrought iron lighting fixtures, and painting the walls that dubious shade of hospital grey.

Philistine says

Weirdly, since we’ve started looking at houses, I’ve noticed the same “landlord special” from Home Cheapo turning up as the “flipper’s special.” It’s like whether you’re renting or buying, you can get the same basic treatment by slapping down some Pergo, putting in some pseudo-Tuscan wrought iron lighting fixtures, and painting the walls that dubious shade of hospital grey.

Do you know why you see so much of that? It's because that's what sells... Maybe not to pat.net readers who want some DIY potential in the house, but that group is a very, very small subset of the buying public. The vast majority of buyers want "move-in ready".

What is so bad with Home Depot fixtures? In most cases, that is all the house warrants. Your not going to put in custom cabinets in a $500k house. That would be an awful investment with very little return.

HousingWatcher says

What is so bad with Home Depot fixtures?

Let's talk about the kitchen AND bathroom faucets our last landlord bought from Home Depot that both leaked within 6 months of installation--one broke and had to be outright replaced and the other constantly required replacement parts like an '80s BMW or something.

The light switches, also bought by our landlord at Home Depot (after rewiring the 100 year old electrical), had low-grade plastic dimmer toggles that all split in half after a year (had to replace all of those, too--except the one in the room we never used).

The handle that came with the new toilet broke in half, again after a year. We actually now have our own toilet handle the we remove/reinstall when we move to a new rental. It's actually made of metal--how 'bout that!

The saddest was the doors--for some reason the original hardwood panelled doors were all replaced with those hollow cardboard faux-panelled doors, and the hinges would always require tighetning because the cheap substrate wouldn't hold the screws.

The place was sorta like that 'Money Pit' movie with Tom Hanks. Very nice, beautiful old house that had been wrecked by low-grade redo's and always had contractors in and out to repair things. We've had these experiences in previous apartments, as well, when they have been "remodelled."

Bottom line is Home Depot quality is crap. It's not about expensive relative to the value of the property, it's about the fact I will have to replace all that garbage well before it's normal life cycle. Now that I'm spotting this stuff in some of these houses around LA, I feel like keeping our rental and saving our money.

When I bought I pretty much ruled out all flips and "remodels". The work was almost always sub-par.

There was a pretty horrible one, they put in a tub and there was no fill spout only a shower head. Kitchen was laid out poorly and they did not put a finished end on the last cabinite. Looking at the property records they were asking ~$150K more than they picked it up for.

The house I bought is very dated but it is solid. I'm going through and redoing or repairing stuff as I need/want to. Personally I like my 1950's green tub/sink/tile. Unlike the new composite crap they are putting in this cast iron tub will probably be around after I am long gone.

VanillaSky says

tatupu70 says

Your plan is just dumb.

which is funny because i’ve already made my money; unlike you.

Anyone who gets a house they like at a price they can afford in an area where their house can at least hold its value at the rate of inflation is a "winner". It doesn't matter if the seller sells at a profit...yes, you can both "win".

Given a value X, are you saying you wouldnt buy a house at 2X if you knew you could sell it years later at 4X if you needed to just because the current owner bought it at X?

But anyways, there are few, if any, incredible deals. Realtors get first dibs and siphon off those properties to themselves or their friends. You have to work pretty hard to find a great deal where you can watch the current owner cry on the stoop as the property is signed over to you because they lost so much money. Do you collect their tears in a jar while you're there for your collection?

StoutFiles says
Given a value X, are you saying you wouldnt buy a house at 2X if you knew you could sell it years later at 4X if you needed to just because the current owner bought it at X?

that's exactly what i'm saying.
instead, i would buy a similar distressed property at 2X, and sell it several years later for 4X.

48% of bay area sales were distressed properties in April, there's no shortage of them in this market.
since every other property sold was a foreclosure or short sale the odds are very good i'll be able to purchase one.

"since every other property sold was a foreclosure or short sale the odds are very good i’ll be able to purchase one."

Not necessarily. In my area, the realtors and cash investors snatch up all the good foreclosures well before they hit the MLS. Only the sh*t ever gets listed for sale. To get a decent foreclosure, you are going to have to do A LOT of leg work on your own.

VanillaSky says

that’s exactly what i’m saying.
instead, i would buy a similar distressed property at 2X, and sell it several years later for 4X.

That's nothing like what you were saying. You were saying that if the owner of the distressed property had equity in it, you didn't want it. Period.

distressed refers to properties that are short sale or foreclosure.

VanillaSky says

distressed refers to properties that are short sale or foreclosure.

OK--That's not how I interpret it. If that's how you are defining it, then I still think your plan is dumb, but you didn't contradict yourself.

tatupu70 says

VanillaSky says

distressed refers to properties that are short sale or foreclosure.

OK–That’s not how I interpret it. If that’s how you are defining it, then I still think your plan is dumb, but you didn’t contradict yourself.

speaking of dumb; at least i don't argue with spambots.

VanillaSky says

tatupu70 says

VanillaSky says

distressed refers to properties that are short sale or foreclosure.

OK–That’s not how I interpret it. If that’s how you are defining it, then I still think your plan is dumb, but you didn’t contradict yourself.

speaking of dumb; at least i don’t argue with spambots.

Are you a spambot?

no but you clearly were arguing with one.

did you forget already?

VanillaSky says

no but you clearly were arguing with one.
did you forget already?

I thought Mr. Fantastic had left--welcome back. We need a few more trolls around here.

I just finished my remodel, and I can share with you dozens of flipper tales from my contractors.

Contractor A told me that he had a flipper client that replaced a bunch of double pane windows on a 60-year vintage house. Needless to say, plenty of termite damage around the windows and beyond. Tight on budget, the flipper ignored it all and covered up with new trimmings, new paint etc. and it covered up very well, even inspection didn't catch any. Contractor A predicts that the house is one rainstorm away from very bad leaking.

Contractor B told me that one of houses that he worked on has slanted foundation, so the walls aren't straight. To correct such a problem, one must do major foundation repair which could cost $25K. The flipper ignored it and went straight to bathroom remodel which attracted unsuspecting buyer. Less than a year later, the one side of the bathroom wall went 80 degrees to the floor, the entire bathroom and the adjacent hallway/MR need an overhaul, plus the foundation repair.

The worst tale is from Contractor C. He was called in to repair plumbing. The new owner bought the house from a flipper, who claimed that he partially repiped the sewage pipes because they were stuck. However, the work was so badly done that the joints were not connected, so the sewage and human manure dripped to the crawl space and collected there causing stink day and night, and one of the homeowner kids got very sick over it.

Having done remodel as a homeowner myself, I realize there are so many way to do things under the hood and if you don't care, you can save tons of money just focusing on the surface while it is completely rotten underneath. And home inspection can only uncover so much.

I will never buy from a flipper, no matter how good the deal is. I prefer to buy a rotten house and do everything myself, to my taste. But if I were to buy a remodeled place, I only buy from someone who has lived with his remodel for at least a few years.

There is no good reason to buy a flip. Why deal with a middle man (the guy who paid the wholesale price, then paid for it to be fixed up, and then sold it so he would make a profit)? If you want a house then YOU should buy it wholesale and YOU should customize it to your liking. You will not have to pay a premium so some guy can make a profit and you will get what you really want.