“I said he made money because he was part of an irrational rising market not because of house-flipping super-powers. They looked at me with shock, they expected the story to pump me up with real estate lust.”

“I met with friends that were going on and on about an uncle that kept buying and flipping houses last year.
They said, “He made 50k on that one, then bought that and flipped it for 80k, then bought that and flipped it for 70k,…”.
I said, “He would have been better off buying one property and doing one sale and increasing his holding period, he made money because he was part of an irrational rising market not because of house flipping super powers. I said transaction costs would have killed him.
They looked at me with shock, because they were expecting the story to pump me up with real estate lust.
Needless to say, they bought a place last year and are renovating it with the intention of flipping it. In addition, Their neighbour is elderly and they want to now convince him to sell his place to them. They said they want the neighbour to sell to them and then just rent it back to the elderly neighbour…. I hope stupidity is rewarded accordingly.”

– Anonymous at vancouvercondo.info October 16th, 2011 at 7:52 am

6 responses to ““I said he made money because he was part of an irrational rising market not because of house-flipping super-powers. They looked at me with shock, they expected the story to pump me up with real estate lust.”

  1. If you make money it’s skill

    If you lose money it’s the market 🙂

  2. What’s the old saying?

    “Don’t confuse brains and a bull market…”

  3. “He would have been better off buying one property and doing one sale and increasing his holding period”

    …These go to 11.

  4. It’s so different here that sellers should just start listing at 1 billion dollars.
    It will be the new normal. That would probably make global tv drool for a minute.

  5. CanuckDownUnder

    Rusty said what?

    “It’s no longer necessarily true that buying a home sets you up for life.”

    Using data from the Household, Income and Labor Dynamics in Australia survey, Professor Wood tracked the housing histories of thousands of Australians from 2001-2009. Among people under 50, the survival rate in home ownership was 77 per cent.

    It was not clear why so many fell out of home ownership but financial pressures and high housing prices appeared to have played a part.

    The former owners who did not return quickly to the property market were more likely to enter public housing or qualify for Commonwealth rent assistance than long-term renters.

    http://smh.domain.com.au/real-estate-news/great-australian-twist-home-buyers-drop-out-20111019-1m871.html

    Just wait until prices start to fall here!

  6. flip, flip, flip, … FLOP!

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