Tuesday, October 16, 2012

Real Estate Mania: Remember The Flippers?

We're going to take a look back today at an article written in the Washington Post. The title is "Flipping Homes Is A Booming Business." Here is a subsection from the article:


Not long ago, John Irvin was selling women’s shoes in the ­Nordstrom at the Pentagon City mall, pulling down about $20 an hour.
Now he flips houses in Northern Virginia — scooping up short sales, rehabbing them and aiming for a quick sell. He has sold three homes and says he netted more than $30,000 in profit each time.
“If I do one house every quarter, I’m making $125,000 a year — at 25 years old,” Irvin said. “All my other friends, they have a 9-to-5 job. They make probably half of what I’m making right now. It’s kind of like hitting the lottery.”

Irvin, the 25-year-old flipper in Virginia, carefully researched each of his three properties — one in Dale City and a pair in Manassas — before buying. He said he spent tens of thousands of dollars improving the houses, refinishing hardwood floors, updating bathrooms, installing new kitchen cabinets and appliances, and landscaping yards but stuck to a tight budget to maximize his profit.
Irvin, who has a business management degree from George Mason University, plans to close on his fourth short sale this month, a home in Fairfax County that is larger and pricier than any he has flipped so far. With low interest rates, scarce inventory, rising home prices and willing buyers around Washington, he doesn’t plan on selling shoes again anytime soon.
“There’s always somebody who’s going to want to buy your house,” he said. “As long as there are short sales or foreclosures, I’m definitely going to want to be doing this.”

Now, can you guess what year this article was written? 2005, 2006, 2007?

Wrong.

This article was published yesterday. October 15, 2012. Yes, folks, the insanity is back. Let's rewind the last quote just for fun:

"There's always somebody who's going to want to buy your house."

The actual title of the article is Flipping Houses Is Once Again A Booming Business. Is it possible that everyone has forgotten what took place only 5 years ago? Can we really already be back to the point where people are quitting their jobs to flip homes?

For more on how this story will end, although readers of this site have a crystal clear understanding, please see US Housing - How Long Can Shadow Inventory Stay Hidden?



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