It seemed so easy probably during the ponzi scheme -
* Lie on loans to buy a property you couldn't afford, in the hopes of quickly selling at a tidy profit
* Rent the property out while it appreciated for a year, then sell for a killing
* Make $40,000 managing a Taco Bell, but make $400,000 flipping a Toll Brothers house
* Taxes? Fees? Paperwork? Fagettaboutit!
For a glimpse of flipper hell, here's a picture of the iamfacingforeclosure.com kid's paperwork disaster. Flippers - meet your new friend, the IRS.
Phoenix, San Diego, DC, Boston, Vegas and more - meet your new friend - 50% price declines as your flipper-bubble deflates and you head back to where you came
So many flippers broke so many laws, cheated on so many taxes, lied on so many loans, and now are stuck with so many below-water properties, figuring out this mess will make "you're doin' a heckof a job Brownie" look like a day at the park. So many towns thought flipper-fueled price increases were permanent, saw a big rush to REIC hiring, and will now feel a crash of epic proportions.
Hope it was all worth it and I hope everyone will learn something from the mess. Here's a glimpse of what's happening out there in flipper hell:
Don't bet on there being a bigger fool than you - The time always comes when the speculative buyer turns forced seller
There is an old saying that the market will do whatever is needed to make the biggest fools of the biggest number of people at any given time.____________
When condo specialist WCI Communities issued a warning last night, it didn't really have any jaws to pick up off the floor. Just as I introduced you to a little game that I call crane-counting down here in South Florida, even the world's worst Monopoly player knew that building condos in overheated markets was a recipe for disaster.
Hobbyist condo flippers were feeling the sting of depreciating assets long before WCI painted its latest grim forecast
____________
Flippers Flee, Long-Term Investors Hold On
As prices have declined, sales have slowed, and inventory levels have risen in recent months, the get-rich-quick, house-flipping days seem to be over for a while.
17 comments:
Floppers!
no, they are blinded by greed.
And yet the faucet keeps dripping and americans are still asleep at the wheel..shame on you.
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Total Fed Credit was up only $1.5 billion last week. The big action was in the banks, which were busily creating enough credit for themselves to use to choke down a whopping $42 billion in government debt. In one week! Loans and leases fell, but idiot Americans, at the apparent top of the housing bubble, racked up another hefty $21 billion in real estate loans last week, and the people that already had houses gorged themselves on another $16 billion in home equity loans! All in one week!
I gulp in amazement. This was all helped no doubt by the foreign central banks adding to the madness by soaking up another $12 billion in government securities last week
http://tinyurl.com/sddqg
This little soap opera will take YEARS to play out. With the major "actors" being"
1. The hapless flippers, trapped in their McMansion and McCondo loans
2. The MBS holders, destroyed in their "Magic Investments" that somehow turned sub-prime debt into AAA credit via the "miracle" of securitization
3. The banks that piled into home loans to the tune of $3 trillion dollars and will be stuck with millions of ex-flipper homes
4. REIC in general as hundreds of thousands of realtwhores, mortgage brokers (both former waitresses and copy-machine salesmen!) are thrown out of work
5. The entire banking and securitization system which will be crippled by the massive defaults
6. The taxpayer, who will be saddled with trillions in bailouts for the fools who starred in this play
So, grab some popcorn, pull up a seat and enjoy the show...
I prefer rasinetts butch :)..but true story..
bought another 10 1oz silver pandas yesterday..not because I was told to because i like the way is shines hahahah!
Condo slowdown in Jersey Shore !!!
http://www.app.com/apps/pbcs.dll/article?AID=/20061019/BUSINESS/610190417/1003
A SLOWDOWN BY THE SEA?
City's condo, townhouse supply up
Posted by the Asbury Park Press on 10/19/06
BY DAVID P. WILLIS
BUSINESS WRITER
LONG BRANCH — A boom in townhouse and condominium construction has been a vital part of oceanfront redevelopment in the city, but the market here is not immune from the slowdown affecting the rest of the real estate industry.
Attracted by Pier Village, the oceanfront Victorian-style complex of shops and restaurants, builders rushed to put up 225 townhouses and 530 owner-occupied condominiums and rental units in the past five years, according to city Planning Director Carl Turner.
"That construction (along the ocean) was in reaction to the renaissance of Long Branch, coupled with an overheated . . . residential real estate market and the beachfront locations," said Jeffrey G. Otteau, president of Otteau Valuation Group Inc. in East Brunswick.
Those units helped to meet a demand for condos and townhouses in Long Branch, a market that was underserved, Otteau said.
Now there are signs that the city's real estate market is slowing down. As of Oct. 1, there was a 12-month supply of condos and townhouses on the market, compared with a nine-month supply a year ago, Otteau said. That's an indication that it is taking longer for sellers to find buyers.
"Today, because of the large increase in home prices for many of those properties, coupled with the deterioration of the overall housing market, what we're finding is that demand there is less because the prices are relatively high for year-round residents as far as condominiums go, and the vacation market has gone dormant for now," Otteau said.
Some real estate agents say it is not clear what will happen.
"There are some people who are saying that with the revitalization of Pier Village and the boardwalk, that it has momentum, and the momentum will carry the next few years," said David Herchakowski, a Realtor associate with Prudential Zack Shore Properties in Rumson.
Condominiums and townhouses are still the new construction of choice for the surrounding area, he said.
More new projects, such as the second phase of Beachfront North, a 185-unit luxury condo-minium development, are on the drawing board. Diamond Beach, a condominium project across from Seven Presidents Oceanfront Park, which, according to its Web site, will have 96 units, also has city approval.
"The wild card is will Long Branch become too saturated with condos? Will the demand keep up with the supply?" Herchakowski asked. "That remains to be seen, depending on what our economy does three or five years out."
West Long Branch real estate agent Dot Schulze said there are 18 condominiums for sale at the Grand Resorts, an oceanfront community. Priced at between $600,000 and $1 million, depending on the ocean view, the community consists mostly of people who have purchased second homes.
"Because of the whole market, we are slow no matter where we are," Schulze said.
She is optimistic. "I feel very strongly that when you are along the ocean, there is always a need for condos," Schulze said.
Liz Scott, broker and manager at Coldwell Banker Residential Brokerage in Long Branch, said the beach is a draw for buyers, but to complete the sales for some new construction now, revitalization efforts will have to reach the Broadway corridor.
"I think there is an awful lot out there available," Scott said. "There is a lot more inventory than there are buyers."
Bork
New one on me. What is a silver panda?
Something I should consider?
Regards,
Python
more on flippers, here's the 3rd part to my series: 4Closure Ranch.
Silly question, but don't most people that have rental homes write off depreciation of those houses to the IRS on their taxes? How would you write off depreciation when the house has been appreciating instead...
http://tinyurl.com/y8n3sy
Up to you python, I follow my own instincts.
While people are (supposibly buying stocks) Ill go in the oposite direction and stick to metals..silver is out performing gold as we speak, and it is still cheap to buy..for now anyway. I am a coin collector anyway so it is a long term investment for me...
someday it will payoff in a big way for sure.
Butch,
I hope you stay to talk more about what Flippers knew and the REIC.
Yeah one flippers wife gave me a great hummer yesterday- Nah I'm still not going to buy the house.
FORCLOSE YOU said...
Borkafatty- You are always going against the flow. This seems to be a very common thread of coin collectors I have met. Any comment?
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hey forclose can you be more specific not to sure what you meant sir
All I know is silver is $12.06...and climbing yes it is..and will.
I have relatives in upstate New York and in Pennsylvania. Prices there, and other non-bubble areas are not so bad, if you can swing it occupationally and don't mind longer, occasionally harsh winters. Point is - you can buy a nice house in a decent neighborhood right now if you have a transferable job, like nursing or freelance writing. Lots of empty nesters up north ready to downscale or move to Florida.
The new mantra for the flipping crowd is: You can make money in ANY PART of the RE cycle".
Hmmmm......maybe that's true for the one in a million who are savy enough.
However, I doubt it's true for your average flipper who (unkowingly!) bought at the peak last year.
Anyone with a track record like that should realize they are likely to LOSE money in any part of the cycle.
But the mantra is a great way to keep scamming people into the "Make $ on RE" seminars.
The Iamfacingfoeclosure kid was on NPR this morning. They did a fairly long story about him.
nobody makes $40,000 managing at Taco Bell
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