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> What matters is how much the next buyer values those changes. Flipping doesn't really exist when appreciation is low. Remember how no one was flipping houses
by onlyrealcuzzo 5y ago
> What matters is how much the next buyer values those changes.
Flipping doesn't really exist when appreciation is low. Remember how no one was flipping houses in 2010? And then in 2012, suddenly everyone in their mom started flipping houses again?
It only makes sense when asset appreciation is high. You'll find that most of the "value added" is simply them holding the house for 6 months and capturing appreciation (on leverage).
- conductr 5y agoWhy then is holding cost such a major concern of every flipper? Each market is different, maybe you've seen that level of unadultered appreciation, but I never have and I live in pretty high growth place my entire life. In my opinion, the "value added" is more correlated with what new construction on the similar land would cost. As lumber prices went up last year, existing homes went up too because the cost of building became higher. Essentially, a flipper wants you to feel like you have a new home at a discount and you'll pay the optimal amount for it.