HOUSING: Feds suspend anti-flipping rule

[garysears]

There is flipping and there is rehabbing. My definition of flipping is minimal addition of value for maximum profit. I consider rehabbing to be reconditioning houses that have been neglected and aren’t in liveable/lendable condition (real value added).

I don’t blame flippers for taking advantage of the market conditions. I do agree there is some minimum profit margin that must exist for rehabbers to risk capital. The flipping/rehabbing scale is really a continuum but the difference between the two is what is an “acceptable” return on investment as judged by me, a potential buyer.

I agree with patb that the problem with flipping is it removes cosmetic fixers from the market, depriving people who look for value of houses at an affordable price. For people looking for a move in ready house, not concerned about cost, this is not a problem. In today’s supply constrained market, there are very few cosmetic fixers, if any, for more conservative buyers.

This current flipper’s paradise would not exist without government/bank support and collusion so that is where the frustration for me lies. I can’t believe a property bought for 130k can be resold for 260k 4 months later with minimal improvement. It seems there continues to be a problem of lending standards and appraisal. How can such a markup be justified without value added?

Flipping is a result of cash being king with distressed sales, and the target flip market being almost entirely FHA buyers. Mortgage purchases cannot compete with cash purchases right now. The prices are all over the map at the low end, especially with short sales, so that is where I see the most potential as a buyer.

I’m making a few offers on short sales because I think the banks are incompetent enough at assessing value and mitigating loss that they might let a property go at a significant discount to current market prices. I simply refuse to pay a flipper 80% return for 3 month of work.

In an ideal world banks would be mitigating losses by lending directly to owner occupants instead of slashing prices to flippers/vultures who will then mark up the price to current market value and pocket the difference.

As long as insane profit margins are out there for flippers I assume prices still have room to fall. Then again, I’m an optimist.

I want to pay the prices the flippers are paying but I can’t due to unlevel playing field and preference for cash deals over financed deals.

[ucodegen]

I totally agree with this statement. They remove cosmetic fixer from the market and add decent move in ready homes.

A cosmetic fixer that someone could have bought in for less and done the work themselves and not have to have paid for the flippers work and profit margin. They could have used ‘sweat equity’ instead. This flipper prevented someone who could have bought in more safely at a lower price, from buying a house affordably.

This does not take into account that the work that some flippers do is so cosmetic that its only purpose is to increase the ability to increase the price as opposed to a needed fix and adding real value. Some of the ‘improvements’ that a flipper puts in, will needed to be torn out to fix the property. I have also seen where flippers either tear out, paint or destroy good curly or wavy maple in the process of doing the flip.

A flipper also has an advantage as to risk. They can buy the property they are going to flip using a corporation, while the person buying to live can’t. This gives protection to the flipper if it goes bad. The corporation gets dissolved and the flipper’s personal finances are not affected. This is different for the end buyer.

[ucodegen]

I totally agree with this statement. They remove cosmetic fixer from the market and add decent move in ready homes.

A cosmetic fixer that someone could have bought in for less and done the work themselves and not have to have paid for the flippers work and profit margin. They could have used ‘sweat equity’ instead. This flipper prevented someone who could have bought in more safely at a lower price, from buying a house affordably.

This does not take into account that the work that some flippers do is so cosmetic that its only purpose is to increase the ability to increase the price as opposed to a needed fix and adding real value. Some of the ‘improvements’ that a flipper puts in, will needed to be torn out to fix the property. I have also seen where flippers either tear out, paint or destroy good curly or wavy maple in the process of doing the flip.

A flipper also has an advantage as to risk. They can buy the property they are going to flip using a corporation, while the person buying to live can’t. This gives protection to the flipper if it goes bad. The corporation gets dissolved and the flipper’s personal finances are not affected. This is different for the end buyer.

[ucodegen]

I totally agree with this statement. They remove cosmetic fixer from the market and add decent move in ready homes.

A cosmetic fixer that someone could have bought in for less and done the work themselves and not have to have paid for the flippers work and profit margin. They could have used ‘sweat equity’ instead. This flipper prevented someone who could have bought in more safely at a lower price, from buying a house affordably.

This does not take into account that the work that some flippers do is so cosmetic that its only purpose is to increase the ability to increase the price as opposed to a needed fix and adding real value. Some of the ‘improvements’ that a flipper puts in, will needed to be torn out to fix the property. I have also seen where flippers either tear out, paint or destroy good curly or wavy maple in the process of doing the flip.

A flipper also has an advantage as to risk. They can buy the property they are going to flip using a corporation, while the person buying to live can’t. This gives protection to the flipper if it goes bad. The corporation gets dissolved and the flipper’s personal finances are not affected. This is different for the end buyer.

[ucodegen]

I totally agree with this statement. They remove cosmetic fixer from the market and add decent move in ready homes.

A cosmetic fixer that someone could have bought in for less and done the work themselves and not have to have paid for the flippers work and profit margin. They could have used ‘sweat equity’ instead. This flipper prevented someone who could have bought in more safely at a lower price, from buying a house affordably.

This does not take into account that the work that some flippers do is so cosmetic that its only purpose is to increase the ability to increase the price as opposed to a needed fix and adding real value. Some of the ‘improvements’ that a flipper puts in, will needed to be torn out to fix the property. I have also seen where flippers either tear out, paint or destroy good curly or wavy maple in the process of doing the flip.

A flipper also has an advantage as to risk. They can buy the property they are going to flip using a corporation, while the person buying to live can’t. This gives protection to the flipper if it goes bad. The corporation gets dissolved and the flipper’s personal finances are not affected. This is different for the end buyer.

[ucodegen]

I totally agree with this statement. They remove cosmetic fixer from the market and add decent move in ready homes.

A cosmetic fixer that someone could have bought in for less and done the work themselves and not have to have paid for the flippers work and profit margin. They could have used ‘sweat equity’ instead. This flipper prevented someone who could have bought in more safely at a lower price, from buying a house affordably.

This does not take into account that the work that some flippers do is so cosmetic that its only purpose is to increase the ability to increase the price as opposed to a needed fix and adding real value. Some of the ‘improvements’ that a flipper puts in, will needed to be torn out to fix the property. I have also seen where flippers either tear out, paint or destroy good curly or wavy maple in the process of doing the flip.

A flipper also has an advantage as to risk. They can buy the property they are going to flip using a corporation, while the person buying to live can’t. This gives protection to the flipper if it goes bad. The corporation gets dissolved and the flipper’s personal finances are not affected. This is different for the end buyer.

[an]

[quote=ucodegen]

I totally agree with this statement. They remove cosmetic fixer from the market and add decent move in ready homes.

A cosmetic fixer that someone could have bought in for less and done the work themselves and not have to have paid for the flippers work and profit margin. They could have used ‘sweat equity’ instead. This flipper prevented someone who could have bought in more safely at a lower price, from buying a house affordably.

This does not take into account that the work that some flippers do is so cosmetic that its only purpose is to increase the ability to increase the price as opposed to a needed fix and adding real value. Some of the ‘improvements’ that a flipper puts in, will needed to be torn out to fix the property. I have also seen where flippers either tear out, paint or destroy good curly or wavy maple in the process of doing the flip.

A flipper also has an advantage as to risk. They can buy the property they are going to flip using a corporation, while the person buying to live can’t. This gives protection to the flipper if it goes bad. The corporation gets dissolved and the flipper’s personal finances are not affected. This is different for the end buyer.[/quote]
I agree with this completely. I personally rather get a house w/ good bone that need a complete remodel at a steal price. However, I know I’m the minority. I see it over and over again where average Joe will more than will pay top dollar for a move in ready home vs one that need remodel. Many people won’t even consider a house that need work.

[an]

[quote=ucodegen]

I totally agree with this statement. They remove cosmetic fixer from the market and add decent move in ready homes.

A cosmetic fixer that someone could have bought in for less and done the work themselves and not have to have paid for the flippers work and profit margin. They could have used ‘sweat equity’ instead. This flipper prevented someone who could have bought in more safely at a lower price, from buying a house affordably.

This does not take into account that the work that some flippers do is so cosmetic that its only purpose is to increase the ability to increase the price as opposed to a needed fix and adding real value. Some of the ‘improvements’ that a flipper puts in, will needed to be torn out to fix the property. I have also seen where flippers either tear out, paint or destroy good curly or wavy maple in the process of doing the flip.

A flipper also has an advantage as to risk. They can buy the property they are going to flip using a corporation, while the person buying to live can’t. This gives protection to the flipper if it goes bad. The corporation gets dissolved and the flipper’s personal finances are not affected. This is different for the end buyer.[/quote]
I agree with this completely. I personally rather get a house w/ good bone that need a complete remodel at a steal price. However, I know I’m the minority. I see it over and over again where average Joe will more than will pay top dollar for a move in ready home vs one that need remodel. Many people won’t even consider a house that need work.

[an]

[quote=ucodegen]

I totally agree with this statement. They remove cosmetic fixer from the market and add decent move in ready homes.

A cosmetic fixer that someone could have bought in for less and done the work themselves and not have to have paid for the flippers work and profit margin. They could have used ‘sweat equity’ instead. This flipper prevented someone who could have bought in more safely at a lower price, from buying a house affordably.

This does not take into account that the work that some flippers do is so cosmetic that its only purpose is to increase the ability to increase the price as opposed to a needed fix and adding real value. Some of the ‘improvements’ that a flipper puts in, will needed to be torn out to fix the property. I have also seen where flippers either tear out, paint or destroy good curly or wavy maple in the process of doing the flip.

A flipper also has an advantage as to risk. They can buy the property they are going to flip using a corporation, while the person buying to live can’t. This gives protection to the flipper if it goes bad. The corporation gets dissolved and the flipper’s personal finances are not affected. This is different for the end buyer.[/quote]
I agree with this completely. I personally rather get a house w/ good bone that need a complete remodel at a steal price. However, I know I’m the minority. I see it over and over again where average Joe will more than will pay top dollar for a move in ready home vs one that need remodel. Many people won’t even consider a house that need work.

[an]

[quote=ucodegen]

I totally agree with this statement. They remove cosmetic fixer from the market and add decent move in ready homes.

A cosmetic fixer that someone could have bought in for less and done the work themselves and not have to have paid for the flippers work and profit margin. They could have used ‘sweat equity’ instead. This flipper prevented someone who could have bought in more safely at a lower price, from buying a house affordably.

This does not take into account that the work that some flippers do is so cosmetic that its only purpose is to increase the ability to increase the price as opposed to a needed fix and adding real value. Some of the ‘improvements’ that a flipper puts in, will needed to be torn out to fix the property. I have also seen where flippers either tear out, paint or destroy good curly or wavy maple in the process of doing the flip.

A flipper also has an advantage as to risk. They can buy the property they are going to flip using a corporation, while the person buying to live can’t. This gives protection to the flipper if it goes bad. The corporation gets dissolved and the flipper’s personal finances are not affected. This is different for the end buyer.[/quote]
I agree with this completely. I personally rather get a house w/ good bone that need a complete remodel at a steal price. However, I know I’m the minority. I see it over and over again where average Joe will more than will pay top dollar for a move in ready home vs one that need remodel. Many people won’t even consider a house that need work.

[an]

[quote=ucodegen]

I totally agree with this statement. They remove cosmetic fixer from the market and add decent move in ready homes.

A cosmetic fixer that someone could have bought in for less and done the work themselves and not have to have paid for the flippers work and profit margin. They could have used ‘sweat equity’ instead. This flipper prevented someone who could have bought in more safely at a lower price, from buying a house affordably.

This does not take into account that the work that some flippers do is so cosmetic that its only purpose is to increase the ability to increase the price as opposed to a needed fix and adding real value. Some of the ‘improvements’ that a flipper puts in, will needed to be torn out to fix the property. I have also seen where flippers either tear out, paint or destroy good curly or wavy maple in the process of doing the flip.

A flipper also has an advantage as to risk. They can buy the property they are going to flip using a corporation, while the person buying to live can’t. This gives protection to the flipper if it goes bad. The corporation gets dissolved and the flipper’s personal finances are not affected. This is different for the end buyer.[/quote]
I agree with this completely. I personally rather get a house w/ good bone that need a complete remodel at a steal price. However, I know I’m the minority. I see it over and over again where average Joe will more than will pay top dollar for a move in ready home vs one that need remodel. Many people won’t even consider a house that need work.

[ucodegen]

I see it over and over again where average Joe will more than will pay top dollar for a move in ready home vs one that need remodel. Many people won’t even consider a house that need work.

To some extent, you may also want to look towards the realtors on this as well as ‘conditioning’. I wonder how many women want to deal with the ‘fixing up’ of a property. I think this also may be part of the equation.

[ucodegen]

I see it over and over again where average Joe will more than will pay top dollar for a move in ready home vs one that need remodel. Many people won’t even consider a house that need work.

To some extent, you may also want to look towards the realtors on this as well as ‘conditioning’. I wonder how many women want to deal with the ‘fixing up’ of a property. I think this also may be part of the equation.

[ucodegen]

I see it over and over again where average Joe will more than will pay top dollar for a move in ready home vs one that need remodel. Many people won’t even consider a house that need work.

To some extent, you may also want to look towards the realtors on this as well as ‘conditioning’. I wonder how many women want to deal with the ‘fixing up’ of a property. I think this also may be part of the equation.

[ucodegen]

I see it over and over again where average Joe will more than will pay top dollar for a move in ready home vs one that need remodel. Many people won’t even consider a house that need work.

To some extent, you may also want to look towards the realtors on this as well as ‘conditioning’. I wonder how many women want to deal with the ‘fixing up’ of a property. I think this also may be part of the equation.

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