Just over a year ago I wrote a thread that digressed into a discussion on flipping:
Can we define flipper?
1) Guy buys a condo in a hot market before it is built with no intention of owning it. Builder set the price.
Flipper? Would speculator be a better term?
2) Woman buys a cosmetic fixer with the intention of living in it for two years. Nothing has really changed inside but she’s got Pottery Barn paint going on now?
3) Contractor buys a run down house. Guts it, saves the old bones and gives it new life with quality construction. It is back on the market six months after project is started.
Posted by: Charles Turner | Apr 18, 2007 8:23:43 AM
Yes, each one is a flipper.
IMHO, anyone who treats houses like the stock market of the late 90s is a flipper. Not that the overabundance of credit has helped the situation, but as credit tightens and inventory increases, I’m not going to feel bad for any of the three categories of people you presented when they lose their hats.
Posted by: Ralph | Apr 18, 2007 9:11:23 AM
Charles: of the three, #3 is actually performing a service; he’s actually producing something. However, I haven’t seen a lot of flipped houses where they did all that much. Usually they paint things up, maybe buy a few kitchen appliances or fixtures, mow the lawn and then turn around a month later and want to get a big premium.
There’s a difference between speculation and production. Most flippers fall solidly in the speculation category. Of course, even #3 can be asking too much for the fixed up house.
Casey Serin is the flipper posterboy:
Posted by: TiP | Apr 18, 2007 11:17:48 AM
No secret that Sapphire Development LLC (I am the managing member) bought a house last year, gutted it to the studs, engineered the conversion from a duplex to a single family residence using an architect and getting permits, and then sold it. It could be inferred that we didn’t lose money as we are under contract to buy another house.
Someone else buys a house. Paints, adds appliances, doesn’t get the require permits for remodeling the kitchen and bathrooms and lists the house. He doesn’t have a CCB license even though his intent was clearly to resell from day one.
I meet the common definition of a flipper (licensed, bonded and insured flipper). The other guy meets the requirements for a flipper label too. You should get to know your flipper just as you get to know your Realtor.