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I wonder if he' talking about those flippers who buy a lower end house in a decent neighborhood. Replace the carpet with LVT, toss on new paint inside and out (did they get a deal on a tank car full of dark gray paint -- every flip house in town gets the same paint job regardless of what it's made of or style); drop in some new plumbing fixtures and new appliances then sell for double the price. Hiding all the structural and systems problems under a coat of paint. Son and his wife bought what they thought was a nice home in a middle-class neighborhood. Within the first year they had to replace the sewer and part of the plumbing, the shiny new floor that had to be torn up to get to the sewer, and the roof. A/C is on the list for this spring, but at least they knew that going in. So far about $40K fixing all the stuff that was hidden behind the new floor and new paint.
I don't get this. Did they hire the worst inspectors ever or did they not do inspections? I personally only recommend inspectors with thermal imagers. It isn't a guarantee to see into the wall, but a plumbing leak in the wall would likely show up on the imager.
I know what the OP is talking about. Last year my client bought a flip because he wanted a house ready to go. It was a decent flip, cosmetics-wise. Builder-grade materials, but the price point was a builder-grade price point so it was consistent. There were some red flags so I had my buyer do an underground oil tank locate, sewer scope, radon test, and a full home inspection.
We got an underground oil tank decommissioned, a sewer line repair, part of the galvanized plumbing replaced, a new roof, a new furnace, and a new water heater out of the deal. Sewer scopes out here can be some of the best money spent. They are like $185. I recommend them on every single home, new construction as well.
It isn't the flippers necessarily (a handful are smarmy, but most are not), but the uneducated buyer agents that people hire that are the problem. Most flippers buy homes and waive inspections as part of the deal so they take on a big risk.
I wonder if he' talking about those flippers who buy a lower end house in a decent neighborhood. Replace the carpet with LVT, toss on new paint inside and out (did they get a deal on a tank car full of dark gray paint -- every flip house in town gets the same paint job regardless of what it's made of or style); drop in some new plumbing fixtures and new appliances then sell for double the price. Hiding all the structural and systems problems under a coat of paint. Son and his wife bought what they thought was a nice home in a middle-class neighborhood. Within the first year they had to replace the sewer and part of the plumbing, the shiny new floor that had to be torn up to get to the sewer, and the roof. A/C is on the list for this spring, but at least they knew that going in. So far about $40K fixing all the stuff that was hidden behind the new floor and new paint.
That's probably it. I lived close to a neighborhood that had structurally unsound houses. Anyone who lived in the area knew the reputation of these houses. Of course the local realtors were well aware of these houses & their deficits & complicit in the sale of them as such. During the subprime mortgage/financial crash era (2005-09), these houses went through multiple foreclosures & cosmetic-only flips. Some of these houses went through more than 10 foreclosure/flip cycles. I have no idea how financing was obtained, except I guess subprime mortgages didn't require inspections & flippers paid cash. The only way that these houses could truly be improved was teardown, remove concrete slab foundation & consult a soils engineer. The flippers didn't do that, they would paint, put in the latest style of cheap flooring, cheap counters, cheap SS appliances, then back on the market. I think the reason this worked is the area that this happened in was a highly desirable community in a highly desirable state.
I don't consider the three-month guy greedy at all. He saw an opportunity and made the best of it. And no one got hurt.
You seem to "see" rampant greed when in fact most of what happens is just businesses and people making money. That is called capitalism. As long as the buyer and seller are happy, where is the greed.
Markets come and go. I have made money selling my homes and I have lost money selling my homes. If someone is smart, and makes a good investment, and makes money, that is not greed and that in itself is not being dishonest.
I have bought and sold seven homes over the years and have yet to find a dishonest buyer or a dishonest seller. I did once encounter a dishonest listing agent, but I was not fooled, again no one got hurt.
We seem to see things differently, and that's okay. I just don't see much greed or dishonesty in the real estate market.
Now where I do see a problem is where a buyer or seller is not very intelligent or savvy and someone takes advantage of that. But if you look at the regulations pertaining to real estate sales you should see there are a lot of safeguards built in to the process to protect the less savvy buyer/seller. But the "government" cannot protect everyone from every stupid thing that someone might do. Or at least they shouldn't have to.
First off, you don’t know what you don’t know.
Flippers usually pay fair market value for condition. Then they line up a bunch of contractors and order what they need to rehab a property for profit. It’s a business. For the most part the flipper and the contractor and the suppliers are all small businesses. Who have families to support.
I have sold dozens of houses to flippers. Time is money.
Some owners are hoarders, some are estates, some have the tenants from hell…there is a market for these types of homes.
A good inspection is a must. I had a good laugh when at one showing the flipper just spray painted the countertops in the kitchen and baths. Sorry that is not a value add.
Well I guess you two have answered my question on who lists these kind of properties. I got news for you, the sight unseen era is over. My grandparents were very old and broke when they died but didn't leave a delapitated home behind. The greedy will eventually get burned when their hot potato cools down. It's just a shame that unsuspecting buyers are so vulnerable, luckily I'm not one of them. I've had great buyer agents btw, I choose wisely.
In this day and age, there should be no such thing as an "unsuspecting buyer." Do your research. Educate yourself. Take responsibility for your decisions.
Location: Formerly Pleasanton Ca, now in Marietta Ga
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Quote:
Originally Posted by Jkgourmet
In this day and age, there should be no such thing as an "unsuspecting buyer." Do your research. Educate yourself. Take responsibility for your decisions.
No the general attitude is never be responsible for yourself, then Blame others. The the next step is telling everyone world is unfair.
Ok, as promised here is a listing. It represents probably the worse problem I often see and everyone has become numb to it. This is obviously a flip attempt. Bought it and listed it five days later for double. But here's what really ticks me off. I guarantee you these photos are from 10-20 years ago, before someone neglected the place. I visited one home recently that had a new roof put on a year ago. Problem is the rest of the house is delapitated, the doors don't even close! You could fall through the floor if you step too hard. Why is this allowed? And the kicker is several real estate cards were left on the kitchen counter. Why are agents that shameless? Why do they lie so much on the listing? The buyer WILL find out the truth as soon as they tour it. I just don't get it. Enlighten me please.
I agree that you don't get it. Of course there are exceptions, but in general the homes that are that bad or flawed, a "normal" buyer can't or won't buy.
If the home condition isn't that bad, it can't be financed with a traditional loan and you still couldn't buy it. The investors that buy a home and bring up to lending standards help buyers purchase homes and make a profit in the process.
If the home could be financed, the buyer still needs capital to update it - but most buyers want at least move in ready if not mostly or entirely updated. It's a business. What isn't there to get?
You can't get the same "deals" they get because you don't have the cash.
I agree that you don't get it. Of course there are exceptions, but in general the homes that are that bad or flawed, a "normal" buyer can't or won't buy.
If the home condition isn't that bad, it can't be financed with a traditional loan and you still couldn't buy it. The investors that buy a home and bring up to lending standards help buyers purchase homes and make a profit in the process.
If the home could be financed, the buyer still needs capital to update it - but most buyers want at least move in ready if not mostly or entirely updated. It's a business. What isn't there to get?
You can't get the same "deals" they get because you don't have the cash.
If an inspector checked this particular home, they would list the flaws, such as "about to collapse on itself" and the lender will still lend it to an uneducated buyer. What I don't get is, why such rampant lieing? Why say there's no HOA when there is? Or there's no tenant when there is? Or "great for first time home buyer" when the opposite is true? And I get it, home inspections prevent bad decisions. But why lie and waste people's time? My realtor was shaking her head when we saw the home in person verses what was depicted in the listing.
Why don't agents take fresh recent photos? The market is like a field of landmines.
If an inspector checked this particular home, they would list the flaws, such as "about to collapse on itself" and the lender will still lend it to an uneducated buyer. What I don't get is, why such rampant lieing? Why say there's no HOA when there is? Or there's no tenant when there is? Or "great for first time home buyer" when the opposite is true? And I get it, home inspections prevent bad decisions. But why lie and waste people's time? My realtor was shaking her head when we saw the home in person verses what was depicted in the listing.
Why don't agents take fresh recent photos? The market is like a field of landmines.
Again, there will be exceptions. And sometimes there are lies and sometimes there is ignorance or mistakes. If a buyer buys a home w/o inspections that's on them for not doing their due diligence. That's why you should look at homes in person and have inspections done.
Also, statements such as "great for first time home buyer" are an opinion, so technically not necessarily a lie. I'm not defending those who intentionally deceive but it's simply not always the case. I've had owners do things and not tell me, including renting a vacant house, which seems crazy but it happens.
Are you just ranting, or actually looking for some sort of action or response?
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