Don't House Flippers Deserve A Profit?
"Don't house flippers deserve a profit?" Following is a blog that I'm "re-blogging" as it is very relevent to what I have been thinking and finding to be true in my area. I have a couple of clients who do this for a living and what they have done to some of these houses is truely amazing. 
(Before photo of cottage in Northern Newaygo County)
Some are estate properties, some foreclosures, but in any case, these folks are not "taking advantage" of anyone's misfortune, these properties need to be sold, and they need to be improved, and here, of all places, in the land of free enterprise, we should understand that with great risk, should come great reward.
(Old Kitchen)
(Renovated cottage)
(Renovated kitchen)
These investors do a great service to us all, and here are some of the reasons I believe the deserve a good profit:
1. Risk...These folks are risking a lot of money. They are taking a gamble that the great expense they go too, to get these homes back in livable (and finance-able) condition will provide them with enough profit to stay in business.
2. Increased Value...In most cases these investors are taking homes in very poor repair, and they are bringing them back to life, which increases the value, which in turn, increases the value of other homes in the neighborhood.
3. Affordable Housing...Finally, they are providing affordable homes in "move-in" condition. These homes in many cases are not able to finance for most people, or if they are, they need so much work that the buyer is not able to take on the task. This is a great service to the community, as in most cases these are the first-time home buyers who, if they are unable to find suitable homes that they can actually get a loan for and feel good about living in, choose instead to continue renting.
In closing, I just want to say that I respect those "House Flippers" that are doing it right, they spend a lot of money to make these houses...homes again, and they deserve to sell them for "fair market value." The question: "How much did they pay for it" should really be irrelevant, instead, we should be asking, how much value is there in what they are providing? If the value is there, let them make their profit, they've earned it.
Randy
(old bathroom in Granny's house)
(new bathroom in Granny's house)
I was out with a home buyer. This was not their first time, we had sold their home a year ago and they have been traveling, visiting family, and RVing across the country....needless-to-say these are my kind of people :). But while I relate to them personally and greatly enjoy their perspectives on life, I was surprised to find a prejudice against "flipper" homes.
Because of my respect for this couple, I asked them if I could blog about this issue on Active Rain and make the conversation public. So beware....this is public.
The couple expressed that they felt that there was something wrong with an investor making money off someone else's tragedy and they didn't want to contribute....fair enough.
But then as I pondered this, I wondered what's wrong with someone taking advantage of a financial situation to create wealth?
It must be made clear that these are not people who bought short sales and are flipping them without any improvements, we were looking at home which were purchased at auction (I can tell because of the way our MLS shows the title) and then spruced up and re-listed. Normally these homes have fresh paint and carpet, the yards have been tidied up or replanted and often....the kitchens and bathrooms have had granite or tile installed. They are lovely homes!
So if an investor purchases the home, takes the financial risk, creates value and reaps a profit....all while providing an easy escrow and quality home....why is this wrong? I don't think it is!
Karen
Karen Fiddler
Broker/Associate
www.great-western-realty.comServing all of Orange County, California Real Estate!
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