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Americans still think they can make money flipping houses

87 points by prostoalex 4y ago

_the_inflator 4y ago
Here are some numbers and statistics: https://www.attomdata.com/news/market-trends/flipping/attom-q1-2022-u-s-home-flipping-report/ https://www.attomdata.com/news/market-trends/flipping/attom-...
WheelsAtLarge 4y ago
It's not just the up keep. House prices are dropping fast. What seemed like a hot market just 6 months ago, it is not a Luke-warm one.
- nxm 4y ago
  They are not dropping fast. Perhaps a $5-20k cut in some regions, but in others they are still appreciating albeit by a smaller amount than in previous years. Too much money and not enough housing to lower prices
Waterluvian 4y ago
Is real estate in the US one of those industries where corner cutters think, “oh that’s an easy career” ? My Instagram timeline has become filled, for some reason, with local (not to me) agents insisting that there is no bubble and now is the time to buy. And they’re all really unprofessional looking and sounding and seem to be worried about one thing: their business.
- nine_zeros 4y ago
  A lot of people in America is looking for a quick buck. Real estate flipping was very successful in the last decade with cheap money. There are entire TV channels ( yes, channels, not shows) showing flipping and renovation in various ways. Many Americans are so tired of the rat race that they are lured by the glory of being able to get off the treadmill and riding off to the sunset. Bubble economies help fuel that dream
  - black_13 4y ago
  - dwater 4y ago
    It’s a magnet for people who want to make a lot more money than they are qualified to get through salaried positions. You don’t need education, specialized skills, credentials, status, or connections to succeed. But you do have to be savvy because it’s a very complex business with many pitfalls. So it attracts people with few other opportunities for success, and a typical trajectory I’ve seen multiple times is they get successful quickly in a rapidly rising market, overextend and over leverage themselves, start cutting corners and committing small fraud to keep the gravy train rolling, and then lose control and collapse spectacularly when circumstances go against them (due to a softening market, failing marriage, substance abuse, etc).
  - samsolomon 4y ago
    The people who host those shows are extremely good. They are excellent designers or builders and have connections to specialists for landscaping, architecture or whatever area they are deficient in. Not only that, but they know how to market themselves.They have an HGTV show because they were able to get the word out about their work. The other part of that is that I don't think most realize how much work something like that takes—it basically is a full-time job. I've got an endless list of projects for my own home and I'm not doing anything close to knocking down walls or updating the kitchen.
- chiph 4y ago
  To a real estate agent, it's always the perfect time to buy. Market is up? "Buy before prices rise!" Market is down? "Buy while prices are low!" There are training classes you can take to get your agent's license, so entering the field is pretty straightforward. There are usually a lot of part-time agents who make enough off each sale to justify staying in the field. And a very few who have worked their way up to selling high-dollar properties and make quite a lot of money. It's customary for a sale to have 6% realtor fees, split between the selling and buying agents. So the more a house sells for, the more they make. A falling market will drive some agents out of the field.
  - jaclaz 4y ago
    >So the more a house sells for, the more they make. A falling market will drive some agents out of the field. Yes and no. This was a chapter in Freakonomics which showed how since their fee is a small fraction of the value, changes in prices would not affect them so much (within limits), i.e. the 3% fee on - say - 1,000,000 is 30,000, if the house price gets to 900,000 the 3% fee is still 27,000, but in order to be able to sell at the full price, they would need more time and have more expenses, so the real incentive for the agent is to sell quickly and find a new house to sell. If you prefer, selling 5 houses at 850,000 is still better than selling 4 at 1,000,000 for the agent. If number of sales go down then the agents will suffer.
    - Waterluvian 4y ago
      Aka. “volume.”
      - jaclaz 4y ago
        Yep, and "time" the original Freakonomics chapter was about comparing prices between houses owned by the realtors against those owned by their customers and it came out that houses owned by realtors took more time to sell but were sold at a higher price, whilst in case of a slow sale the incentive was to convince the customers to lower the asking price: http://pricetheory.uchicago.edu/levitt/Papers/LevittSyverson2004.pdf http://pricetheory.uchicago.edu/levitt/Papers/LevittSyverson...
- snowwrestler 4y ago
  Real estate is a field where you can succeed on hard work and hustle without much expensive professional education. A good real estate agent in a nice area can make as much as a dentist, but they didn’t have to go to expensive school for years just to get started. The required training is relatively minimal. There are certainly “corner-cutters” in real estate just like any industry. But to make real estate a sustainable career, it really does take a lot of hard work, hustle, and integrity. Most long-term agents live off of referrals and repeat customers. Or have enormous marketing costs, which also takes skill to manage.
mchusma 4y ago
If real estate is to be a good investment, it must become less affordable over time. The idea that real estate in general is a good investment is dangerous to our economy. The solution to housing is reducing subsidies and removing supply side restrictions. However these are not politically popular in a world where people want housing prices to go up.
- saiya-jin 4y ago
  Yes if everybody should live in their own real estate. There are superbly working economies where this is not true for many decades for various reasons (ie Switzerland) and they do just fine and people are happy, just focus on more important matters in life. There are many arguments against urban sprawl which is direct consequence of such approach.
  - nxm 4y ago
    Not a fan of comparisons of other countries to one of the most wealthy per capita, homogenous one. Switzerland is an exception and not a rule
    - formerkrogemp 4y ago
      Take your pick from other European countries. Asian countries have much, much higher population density than the US. Is their standard of living as high in many of those countries? No? Do they enjoy reserve currency status? No. Do they make it work anyways? Yes. Could we learn many useful ways of living and building and structuring our businesses, lives, and economy? Yes! I'm tired of the snide dismissals that we Americans make to any comparison between our country and others. Oh, well, our country is special and exceptional, heterogeneous and large, so we have nothing to learn and cannot possibly change things here. Even if you arrogantly assume America is the best at everything and leads the world in so many ways, much can still be learned from the way others live their lives and structure their homes, businesses, and societies. You can compare apples to oranges. They're both fruit! Biologists compare species all the time to learn more about the species and to better ourselves with that knowledge. We can learn about and from other countries and peoples while disclaiming some of the differences. At the very least we can acknowledge that it works elsewhere and that what they do could be done here in at least a limited fashion or successful manner. Even if we're red apple fruits and they're bloody oranges, they're both fruit and both countries.
black_13 4y ago
bluGill 4y ago
You can make money flipping houses. However it becomes a job and you need to treat it like one. You have to invest in the right house, a house that only needs paint and it will sell for a thousand profit vs a house that needs to have the main beams replaced to get $50000 profit. The above numbers are real required profit because of the risk you are taking, and also the time that you own the house paying intrest waiting for the next buyers to take over. There is a different type of flipper who gets into each of the above, getting the wrong house will break you. Either way you need enough houses in progress to always be working, and there are so many houses in any city to work with. Yes you can make money, but that doesn't mean you will. It is a complex job and not for everyone.
- SamuelAdams 4y ago
  What’s interesting is that this article seems to insinuate flippers as holding onto houses for 5 years. Then they go on to say the maintenance and mortgage payments eat into the profits. Well yes, of course that is an issue. But most flippers I’ve seen in my neighborhood only own the property for a max of 3 months. They make cosmetic changes and maybe some core changes (new roof, hvac), then turn around and sell it in less than a week. Most flippers are not holding onto property for 5 years. That’s just regular people living in houses.
- hiptobecubic 4y ago
  This kind of extremely risky approach to earning money, where one mistake ruins you, is colloquially referred to as "gambling."
  - bluGill 4y ago
    I.know someone who has been doing it for decades. Some houses lose money, but most make money and he always has several in progress. Realtors call him when they see a house that won't sell fast.
- auganov 4y ago
  If you invest a lot of effort and expertise on the renovation side you can remove most of the risk. It's like getting into the contracting business but you get to pick your own jobs. IMO it's one of these under-saturated things that most smart people just don't want to do.
pmorici 4y ago
Housing is unique in that it is one of the few, maybe the only, assets where leverage in the form of a loan is relatively easily available to even people without a lot of assets. Where as other forms of leverage like margin loans require the borrower to already have assets for collateral. To buy a house you basically just need a reasonable job and a few thousand for the down payment.
- lotsofpulp 4y ago
  Because taxpayers subsidize it by accepting looser underwriting standards.
  - alphabettsy 4y ago
    It’s subsidized regardless. There are countless tax incentives for homeowners.
    - deleted 4y ago
      [deleted]
    - lotsofpulp 4y ago
      I was referring to taxpayers subsidizing the actual loan itself, not the act of owning a home. What are the tax incentives (in the US)? On a federal level, all I can think of is mortgage interest tax deduction, but that was greatly neutered in 2017 TCJA, and less than 10% of Americans can benefit from it. And that is a tax incentive to borrow money to buy a home, not a tax incentive for home owners. Only other one is 1031 exchange, but that is rarely needed for typical homeowners and is available to all real estate owners. On a state/local level, I guess there are some locales with property tax adjustments, but other than that, I cannot come up with any.
      - zacherates 4y ago
        The biggest tax benefit of living in an owner occupied home is that nobody pays income tax on the rent you would pay if you were living in a house someone else owned. ... but most places don't have the stones to tax imputed rent [1]: Belgium, Iceland, Luxembourg, the Netherlands, Slovenia, Spain and Switzerland being exceptions. [1] https://en.m.wikipedia.org/wiki/Imputed_rent https://en.m.wikipedia.org/wiki/Imputed_rent
hardwaresofton 4y ago
This isn’t 2008, at this point I think people are underestimating the speculative home buyer. The people who are buying houses now are more likely people looking to build rental income cash cows. In a world where productivity is somewhat slowing after massive growth, people are taking to rent seeking activity and the disincentives aren’t there to encourage productive behavior. Why buy and sell when you can buy, charge rent, and pass down to your kids?
- Victerius 4y ago
  Eventually, people just move away. US states with a high cost of living have lost millions of residents to low cost of living states during the last 10 years, to the point when California and New York are about to lose an electoral college seat each. And, yes, California and New York landlords are partially responsible for that for the reasons mentioned above. The financial industry is moving away from the northeast to the south, primarily Florida, Texas, and the Carolinas. High rents, taxes, and property prices make people and businesses run away.
  - nxm 4y ago
    Property taxes,income taxes, fuel taxes, high utilities costs all limit growth of prices in blue states.
    - formerkrogemp 4y ago
      On the flip side, "red" states are seeing rapid population growth from climate and economic migration, so inflation is high for low wage earners in the low cost of living areas. We're probably going to see a smaller range in costs between LCOL and MCOL than we have recently.
      - briandear 4y ago
        Nobody is migrating to Texas over climate.
tyjen 4y ago
House price fluctuation is still local market dependent. People who purchased overpriced, new mass developer homes in saturated newer markets may suffer a contraction. Areas with supporting high demand, low inventory, and inability to develop newer properties will maintain increasing valuation, but not at the same rate. A savvy home flipper can still make money, it's just harder to do so with increased competition in that area. This isn't a repeat of the 2008 financial crisis, in which financial institutions overloaded on mortgage-backed securities fueled by easy access mortgage loans without thorough loan application vetting. The deluge of foreclosures isn't likely to occur and people are likely to hold onto their houses and maintain firmer home prices during this slowdown.
- Kon-Peki 4y ago
  > Areas with supporting high demand, But most people think that this is an accurate description of their local market, and I'm not so sure that it is.
  - tyjen 4y ago
    Most people don't know how to evaluate a market and are more short-sighted than they want to admit to themselves. It's reflected within entrepreneurship too, with ~50 percent failure within 5 years. Seattle: Severely limited land area mass surrounded by water with robust business sector. Single-family homes will become rarer across time with local pushes to develop multi-family domiciles. And, if you buy waterfront, your security increases substantially. Colorado Springs: Mountains impede development slightly with large military presence, but you can build suburban developments for as far as the eye can see in most directions. Prior to a slowdown, people see prices increasing and apply it too strongly to future results. But, one of these areas will be far more insulated from price fluctuations than the other.
m0llusk 4y ago
It is an amazing contrast with the situation when I was younger. House prices were bounded by wages and were understood to be depreciating assets. That is, without constant investment they lost their value and became unusable and difficult to trade. Even in the best of times it takes time, preparation, and fees to sell real estate. Landlording was a rich person's game because of the risk involved and if you really wanted to make money it was expected that any properties to be rented should be fully paid off because of the slim profits and high risk of damage to the property. The whole idea of fearing loss of value was completely different: Nowadays houses are bidding chips and people want to make the numbers go up to feel rich. In the past sharp losses of value meant the area was no longer desirable so that people were not moving in and so wages would no longer support prices in that area. Either things were modest and relatively stable or unstable and sinking. The current attitude toward housing is based on the recent explosion of house prices which is driven by financialization, extremely low interest rates, and demand outpacing supply where there are jobs. Economic, political, and demographic changes are very likely to wipe all of that out in a relatively short period.
- endisneigh 4y ago
  What area are you referring to where housing was understood to be a depreciating asset? Though that’s true in the literal sense, there are only a handful of instances in American history where they was empirically the case. Not to mention you don’t specify a locale which is the most important thing in real estate, heck, these days perhaps a neighborhood.
  - smt88 4y ago
    In much of the North and Rust Belt of the US, houses declined in real dollars between the heydey of the mid-20th century and now. Detroit is a good example.
    - hiptobecubic 4y ago
      Ok but didn't Detroit like... collapse? Not every city is an economic monoculture of an industry that was offshored.
gfrff 4y ago
One of the differences is you c can liver in the investment. This means either not paying rent or collecting rent. The appreciation might be lower than the stock market but dividends are less than rent too.
nxm 4y ago
Easy way to save money when selling a home is to just sell it yourself. Real estate agents are, imho, one of the most useless professions. All you need is a real estate attorney, which you’d need one anyway.
- coldcode 4y ago
  I just sold my house for a ridiculous number. My realtor got 50 people to tour the house in a single weekend, and 5 places offers and I took the one 10% over the asking price. It's not a mansion or anything, and not in some high tech city, but nice area and a bit of land. The 6% commission is not really that much. Just prepping the house took all of my energy; trying to do marketing as well would have been too much. Like many things you can do everything yourself, or contract to others to do the things you are not good at, or don't have time for. Arguing realtors are useless is like saying accountants are useless, or lawyers are useless. I also did not re-roof my house. But of course you could get terrible accountants, lawyers or roofers, and you could possibly be terrible at stuff yourself. Some people think programmers are useless and some are, but that's not sufficient to try writing it yourself if you aren't one.
  - jaclaz 4y ago
    >The 6% commission is not really that much. Sure, because you (or your agent) managed to sell 10% more than asking price. Try re-evaluating this 6% if all offers were 85-90% of asking price, and confirm that it is not really that much.
    - matsemann 4y ago
      But who determines the asking price? Not hard to claim success if the realtor themselves sets the bar.
    - hiptobecubic 4y ago
      They're saying that that's the whole point of the realtor. Obviously hiring a crappy realtor that can't find buyers that actually want your house is bad.
ryanmercer 4y ago
We bought our house about 20 months ago, the guy bought it at auction for about 50k and sold it to us for 179k (and now it's worth 230-245k because of the past 2 years) after having flipped the one across the street soooo, I mean...
ashalhashim 4y ago
“Between 2006, the peak of the previous housing bubble, and 2019, average home prices have increased just 13%, according to the S&P/Case-Shiller Home Price Index. In that same time period, the S&P 500 rose 125%. In other words, stocks did 10 times better than real estate” I can’t take an article seriously when it purposefully ignores what’s happened in the last three years because it negates the point it’s trying to make.
- foobarian 4y ago
  Weasel words. Should have said "In other words, stocks did 10 times better than real estate... if you bought and sold at those exact times". It's easy to cherrypick these high and low marks to prove whatever point you need.
- jfk13 4y ago
  The article is dated 2019, so it's not a case of "purposefully ignores what's happened"; the last three years hadn't happened yet!
jacknews 4y ago
The problem with this argument is rent. If you can buy a house (to live in) without a mortgage, or with a very low rate, you not only reap the capital gain, but save on paying someone else rent.
- sys_64738 4y ago
  Generally a mortgage is finite then you own the asset whereas rent is infinite with no asset afterwards. I don't get the reason others buy or rent but for me it's all about owning my home with mortgage payed off ASAP. The last thing you want going into retirement is paying for a place to live.
- briandear 4y ago
  You pay the government rent in the form of high property taxes. It’s insane that you can never actually own your house. Taxes should be based on consumption, not income, or simply existing.
  - jacknews 4y ago
    Actually, although it makes complete sense to own land rather than pay rent in perpetuity in our current economic system, it is also totally unjust. The land belongs to all of us, like the air. Allowing individuals to own it, and especially to bequeath it, is the root of many of our problems,
nimbius 4y ago
as someone in and around professional tradecraft its always burned my ass to watch a husband wife couple buy a slab on grade clapped out flophouse with structural failure, pump $2200 worth of cheap contractor fixtures bathtub inserts and granite counters into it, and demand triple its price before it falls into the earth and their overleveraged low interest loan blows up an already teeterng market.
findthewords 4y ago
Demand-side economics: Low mortgage rates create a shortage of affordable housing by increasing demand. For example: -Speculators buying things and selling them for higher price later, that is a rational thing to do. -Normal folk who simply want a home rarely think long term, 50 years into the future, during which rates may vary and only look at what they can afford to pay monthly, right now. In a high interest rate, high inflation, high wage growth world houses are a BAD INVESTMENT because of erosion of value by inflation. What happens to bad investments? Their prices collapse, investors seek targets elsewhere. The only people who buy affordable housing in a high inflation environment are people who don't mind the deprecation in value and have a steady income to afford it.
fio_ini 4y ago
If you're gonna live somewhere between 2-5 yEars why wouldn't you buy so you can save money and build equity. Even with high interest rate... use this https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html https://www.nytimes.com/interactive/2014/upshot/buy-rent-cal...
jmyeet 4y ago
Whoever wrote this doesn't really understand what they're talking about. Side note: this is written in 2019. Can we update the title? First, terminology. "Flipping" houses has a completely different meaning. The author mentions buying a house and "flipping" it 5 years later. That's not what flipping is. Flipping is short-term and typically means rehabing a property. Done quickly, you can make a profit on this if you're good and can control your costs and keep to short time frames. People do pay a premium for finished products and/or just don't want to deal with the headaches of massive renovations. Second, the author makes the same mistake every pro-stocks author makes and completely ignores leverage and borrowing rates. 1-2 years ago you could get a 30 year fixed mortgage as low as 2.5% with an 80-95% LTV. Try getting that on any portfolio. Houses don't have margin calls either. Third, this was written in 2019. A lot has happened since then. The 2006 to 2022 housing situation is radically different. Fourth, the national average of house price growth over that period isn't really meaningful. This isn't stock-picking as the author alleges. Just narrow it to greater metro areas with low unemployment, a growing population (even modestly so) and relatively low state public debt (ie not Illinois) and the picture is radically different. Fifth, real estate tends to be a very good hedge against inflation. We're seeing that now. Inflation has skyrocketed and so has housing in the last year. That's not an accident. There are some systemic problems here but that's a separate topic. As someone who is trying to protect the real value of your assets, you only really care that it is could happen or is happening not necessarily why. Lastly, property tends to be much better at generating an income than any other asset class. Gross yields of 8-10% aren't that uncommon. Getting a dividend yield like that is going to be much harder and will have much greater capital risk.
- metacritic12 4y ago
  Absolutely agree with your analysis above. The econ of the article's analysis is rubbish. She compares indexes that exclude dividends, cherry picks time periods, doesn't seem to command basic econ understanding. There are lots of good reasons to critique house flipping, like she could have: - Given statistics on average returns of house flippers. - Show how naïve investors and flippers get burned. - Even a piece of ancedata about one couple getting burned is at least real news. But she doesn't do any of that.
- 4y ago
bluedino 4y ago
Think? During the last year they were doubling their money around here.
metacritic12 4y ago
Is CBSNews doing novel research in this article? It starts with reporting a survey on Americans' beliefs (specifically that they can make money flipping houses). This is fine and normal news. Then it transitions to novel research where the not-explicitly-questioned ground truth is "no: real estate flipping can't make money". How about cite some economists about bad future returns. Or at least some bank analysts? Instead, CBSNews's "analysis" that real estate doesn't make money starts with this gem: "Sadly, real estate is no better an investment today than it was in the previous century—and that's to say, mediocre at best. For people with a bit of money to put away, the stock market will almost always give the best return. Between 2006, the peak of the previous housing bubble, and 2019, average home prices have increased just 13%, according to the S&P/Case-Shiller Home Price Index. In that same time period, the S&P 500 rose 125%. In other words, stocks did 10 times better than real estate." The author assumes: - That returns to housing measured from the past peak is an unbiased estimate of housing returns. - That returns to stocks measuring up to today (one of the biggest stock bull runs) is an unbiased estimate of stock returns. - And that past returns from these periods will predict future performance. - To put the cherry on top, she compares two price indexes, not total return indexes. Dividends (rents) are totally excluded from the series. None of this is pointed out by the article itself, or even questioned. The most basic first-year-econ-undergrad mistakes are being made here. Which is unsurprising since this analysis seems like a journo LARPing as an economist to finish a writing assignment.
astura 4y ago
This article is extremely confusing. It's comparing stocks, a purely financial instrument, with a personal home that you live in and calling that "flipping houses." It's just all over the place and very surprising it's coming from such a mainstream publication. People mainly buy the houses they live in in order to have a place to live, full stop. Investment properties are a completely different concept and most Americans aren't involved in real estate investing whereas most Americans are involved in buying personal homes. It also totally makes sense people who are very unfamiliar with financial instruments (like young people) don't have any idea about what sort of return they have. Everyone's familiar with houses though - TFA says 2/3rds of Americans own their house. Like, duh, you aren't going to make money just buying a house to live in - If I sold my house at a big profit because the housing market overall increased I'd still have to live somewhere so my "profit" would just go into the increased cost of my new house and I'd be out closing fees and agent fees on both ends. I think a house you buy to live in is a bad investment and I own much more stocks than I have equity in my house. I've put thousands into my house in the last several months especially and it only seems to be getting more and more expensive every year I own it. I'm thinking I might have to reduce my monthly savings for the first time ever. However, I have to live somewhere and I like the security of owning my house and I like that I can customize it and nobody tells me I can't have cats. I have the money to pay extra for that. It's not an investment though, at least not a financial one.
- astura 4y ago
  Follow up to my own comment because I'm still baffled by this article that I keep thinking about it. I guess the article is based on a survey where the question was "For money you wouldn't need for more than 10 years, which ONE of the following do you think would be the best way to invest it?" and the top answer is "real estate." So yeah, that doesn't AT ALL mean that people who answer "real estate" think that the house that they live in will make them rich. Some might think that, but most people think buying an investment property means that the buyer will buy low and rehab it to flip or rent it to collect income. The entire premise of this article just doesn't make sense.
frankbreetz 4y ago
Flipping houses is not that different then building houses. If you buy a house that is not inhabitable make, make it habitable and sell it for a profit, that is value added to the economy and is a good career path. There are some people that take advantage of uninformed sellers buy a house cheap and put some paint on it and mark it up significantly, but there are bad people in every industry. This paragraph makes it sound like a hit piece: >>Between 2006, the peak of the previous housing bubble, and 2019, average home prices have increased just 13%, according to the S&P/Case-Shiller Home Price Index. In that same time period, the S&P 500 rose 125%. In other words, stocks did 10 times better than real estate. -Seletivly picks a period of the biggest housing crash in history and there is still increase. -that would be the amount it increased with no value add. -if you buy, hold, and rent you will make significantly more. If you are talking a 13 year period you are probably doing this. You buy with mortgage, have tenants pay mortgage, mortgage gets paid off plus profit. This stat leaves of monthly profit plus the fact you only had to 20% down, so you cash on cash return of just appreciation is closer to 75%. Also about 30% of your mortgage would get paid of if you had a 30 year mortgage, and almost all of a 15 year mortgage. Real estate can grow with cpi and still be a good investment. You just can't be leech and have to add value to the economy. I.e Let some live there and build improvements. It is more hands on,but definitely better returns then the stock market.
Joel_Mckay 4y ago
Las Vegas was built on the irrational ambition of gamblers, and on average every visitor still loses to this day. However, there are some rules about Dirt that have held for a few centuries: 1. “30% rule”: if your principle+interest+tax payments exceed 30% of your income for the duration of the debt, than your family will always remain poor and unlikely understand why 2. “200 month rule”: a holdings true worth is only what can be extracted from renting it for 200 months... the rest is 100% BS... 3. “Check regional population trends age profile”: Most speculative investors understand there is a >17% population decline happening over the next decade, and will focus on urban centers for risk mitigation. In my opinion, inner-city senior care homes are a good investment for the same reason. 4. “Never trust anyone not legally obligated to respect your interests”: Make sure a bonded financial-adviser fiduciary type appropriate to your needs is signed on with your legal representatives. Opinions from Bankers, random investment advisers, and golf buddies can have ulterior motives (toxic assets, TV hyped pump-and-dump scams, and cult stock-swarming scams). Dirt backed holdings are not what most people assume, and watching the equity get clawed back by banks again never ceases to amaze. The real insult was the 3 million foreclosed American homes still making payments in the last credit-crunch, reacquired with taxpayer bailout money, and then rented back by wall-street funded holding firms to the same families at another address. No one went to jail, nothing changed legally, and like any successful con it will likely happen again soon.
deleted 4y ago
[deleted]

87 points by prostoalex 4y ago

Here are some numbers and statistics: https://www.attomdata.com/news/market-trends/flipping/attom-q1-2022-u-s-home-flipping-report/ https://www.attomdata.com/news/market-trends/flipping/attom-...

WheelsAtLarge 4y ago

It's not just the up keep. House prices are dropping fast. What seemed like a hot market just 6 months ago, it is not a Luke-warm one.

nxm 4y ago
They are not dropping fast. Perhaps a $5-20k cut in some regions, but in others they are still appreciating albeit by a smaller amount than in previous years. Too much money and not enough housing to lower prices

Waterluvian 4y ago

Is real estate in the US one of those industries where corner cutters think, “oh that’s an easy career” ? My Instagram timeline has become filled, for some reason, with local (not to me) agents insisting that there is no bubble and now is the time to buy. And they’re all really unprofessional looking and sounding and seem to be worried about one thing: their business.

nine_zeros 4y ago
A lot of people in America is looking for a quick buck. Real estate flipping was very successful in the last decade with cheap money. There are entire TV channels ( yes, channels, not shows) showing flipping and renovation in various ways. Many Americans are so tired of the rat race that they are lured by the glory of being able to get off the treadmill and riding off to the sunset. Bubble economies help fuel that dream
- black_13 4y ago
- dwater 4y ago
  It’s a magnet for people who want to make a lot more money than they are qualified to get through salaried positions. You don’t need education, specialized skills, credentials, status, or connections to succeed. But you do have to be savvy because it’s a very complex business with many pitfalls. So it attracts people with few other opportunities for success, and a typical trajectory I’ve seen multiple times is they get successful quickly in a rapidly rising market, overextend and over leverage themselves, start cutting corners and committing small fraud to keep the gravy train rolling, and then lose control and collapse spectacularly when circumstances go against them (due to a softening market, failing marriage, substance abuse, etc).
- samsolomon 4y ago
  The people who host those shows are extremely good. They are excellent designers or builders and have connections to specialists for landscaping, architecture or whatever area they are deficient in. Not only that, but they know how to market themselves.They have an HGTV show because they were able to get the word out about their work. The other part of that is that I don't think most realize how much work something like that takes—it basically is a full-time job. I've got an endless list of projects for my own home and I'm not doing anything close to knocking down walls or updating the kitchen.
chiph 4y ago
To a real estate agent, it's always the perfect time to buy. Market is up? "Buy before prices rise!" Market is down? "Buy while prices are low!" There are training classes you can take to get your agent's license, so entering the field is pretty straightforward. There are usually a lot of part-time agents who make enough off each sale to justify staying in the field. And a very few who have worked their way up to selling high-dollar properties and make quite a lot of money. It's customary for a sale to have 6% realtor fees, split between the selling and buying agents. So the more a house sells for, the more they make. A falling market will drive some agents out of the field.
- jaclaz 4y ago
  >So the more a house sells for, the more they make. A falling market will drive some agents out of the field. Yes and no. This was a chapter in Freakonomics which showed how since their fee is a small fraction of the value, changes in prices would not affect them so much (within limits), i.e. the 3% fee on - say - 1,000,000 is 30,000, if the house price gets to 900,000 the 3% fee is still 27,000, but in order to be able to sell at the full price, they would need more time and have more expenses, so the real incentive for the agent is to sell quickly and find a new house to sell. If you prefer, selling 5 houses at 850,000 is still better than selling 4 at 1,000,000 for the agent. If number of sales go down then the agents will suffer.
  - Waterluvian 4y ago
    Aka. “volume.”
    - jaclaz 4y ago
      Yep, and "time" the original Freakonomics chapter was about comparing prices between houses owned by the realtors against those owned by their customers and it came out that houses owned by realtors took more time to sell but were sold at a higher price, whilst in case of a slow sale the incentive was to convince the customers to lower the asking price: http://pricetheory.uchicago.edu/levitt/Papers/LevittSyverson2004.pdf http://pricetheory.uchicago.edu/levitt/Papers/LevittSyverson...
snowwrestler 4y ago
Real estate is a field where you can succeed on hard work and hustle without much expensive professional education. A good real estate agent in a nice area can make as much as a dentist, but they didn’t have to go to expensive school for years just to get started. The required training is relatively minimal. There are certainly “corner-cutters” in real estate just like any industry. But to make real estate a sustainable career, it really does take a lot of hard work, hustle, and integrity. Most long-term agents live off of referrals and repeat customers. Or have enormous marketing costs, which also takes skill to manage.

mchusma 4y ago

If real estate is to be a good investment, it must become less affordable over time. The idea that real estate in general is a good investment is dangerous to our economy. The solution to housing is reducing subsidies and removing supply side restrictions. However these are not politically popular in a world where people want housing prices to go up.

saiya-jin 4y ago
Yes if everybody should live in their own real estate. There are superbly working economies where this is not true for many decades for various reasons (ie Switzerland) and they do just fine and people are happy, just focus on more important matters in life. There are many arguments against urban sprawl which is direct consequence of such approach.
- nxm 4y ago
  Not a fan of comparisons of other countries to one of the most wealthy per capita, homogenous one. Switzerland is an exception and not a rule
  - formerkrogemp 4y ago
    Take your pick from other European countries. Asian countries have much, much higher population density than the US. Is their standard of living as high in many of those countries? No? Do they enjoy reserve currency status? No. Do they make it work anyways? Yes. Could we learn many useful ways of living and building and structuring our businesses, lives, and economy? Yes! I'm tired of the snide dismissals that we Americans make to any comparison between our country and others. Oh, well, our country is special and exceptional, heterogeneous and large, so we have nothing to learn and cannot possibly change things here. Even if you arrogantly assume America is the best at everything and leads the world in so many ways, much can still be learned from the way others live their lives and structure their homes, businesses, and societies. You can compare apples to oranges. They're both fruit! Biologists compare species all the time to learn more about the species and to better ourselves with that knowledge. We can learn about and from other countries and peoples while disclaiming some of the differences. At the very least we can acknowledge that it works elsewhere and that what they do could be done here in at least a limited fashion or successful manner. Even if we're red apple fruits and they're bloody oranges, they're both fruit and both countries.

black_13 4y ago

bluGill 4y ago

You can make money flipping houses. However it becomes a job and you need to treat it like one. You have to invest in the right house, a house that only needs paint and it will sell for a thousand profit vs a house that needs to have the main beams replaced to get $50000 profit. The above numbers are real required profit because of the risk you are taking, and also the time that you own the house paying intrest waiting for the next buyers to take over. There is a different type of flipper who gets into each of the above, getting the wrong house will break you. Either way you need enough houses in progress to always be working, and there are so many houses in any city to work with. Yes you can make money, but that doesn't mean you will. It is a complex job and not for everyone.

SamuelAdams 4y ago
What’s interesting is that this article seems to insinuate flippers as holding onto houses for 5 years. Then they go on to say the maintenance and mortgage payments eat into the profits. Well yes, of course that is an issue. But most flippers I’ve seen in my neighborhood only own the property for a max of 3 months. They make cosmetic changes and maybe some core changes (new roof, hvac), then turn around and sell it in less than a week. Most flippers are not holding onto property for 5 years. That’s just regular people living in houses.
hiptobecubic 4y ago
This kind of extremely risky approach to earning money, where one mistake ruins you, is colloquially referred to as "gambling."
- bluGill 4y ago
  I.know someone who has been doing it for decades. Some houses lose money, but most make money and he always has several in progress. Realtors call him when they see a house that won't sell fast.
auganov 4y ago
If you invest a lot of effort and expertise on the renovation side you can remove most of the risk. It's like getting into the contracting business but you get to pick your own jobs. IMO it's one of these under-saturated things that most smart people just don't want to do.

pmorici 4y ago

Housing is unique in that it is one of the few, maybe the only, assets where leverage in the form of a loan is relatively easily available to even people without a lot of assets. Where as other forms of leverage like margin loans require the borrower to already have assets for collateral. To buy a house you basically just need a reasonable job and a few thousand for the down payment.

lotsofpulp 4y ago
Because taxpayers subsidize it by accepting looser underwriting standards.
- alphabettsy 4y ago
  It’s subsidized regardless. There are countless tax incentives for homeowners.
  - deleted 4y ago
    [deleted]
  - lotsofpulp 4y ago
    I was referring to taxpayers subsidizing the actual loan itself, not the act of owning a home. What are the tax incentives (in the US)? On a federal level, all I can think of is mortgage interest tax deduction, but that was greatly neutered in 2017 TCJA, and less than 10% of Americans can benefit from it. And that is a tax incentive to borrow money to buy a home, not a tax incentive for home owners. Only other one is 1031 exchange, but that is rarely needed for typical homeowners and is available to all real estate owners. On a state/local level, I guess there are some locales with property tax adjustments, but other than that, I cannot come up with any.
    - zacherates 4y ago
      The biggest tax benefit of living in an owner occupied home is that nobody pays income tax on the rent you would pay if you were living in a house someone else owned. ... but most places don't have the stones to tax imputed rent [1]: Belgium, Iceland, Luxembourg, the Netherlands, Slovenia, Spain and Switzerland being exceptions. [1] https://en.m.wikipedia.org/wiki/Imputed_rent https://en.m.wikipedia.org/wiki/Imputed_rent

hardwaresofton 4y ago

This isn’t 2008, at this point I think people are underestimating the speculative home buyer. The people who are buying houses now are more likely people looking to build rental income cash cows. In a world where productivity is somewhat slowing after massive growth, people are taking to rent seeking activity and the disincentives aren’t there to encourage productive behavior. Why buy and sell when you can buy, charge rent, and pass down to your kids?

Victerius 4y ago
Eventually, people just move away. US states with a high cost of living have lost millions of residents to low cost of living states during the last 10 years, to the point when California and New York are about to lose an electoral college seat each. And, yes, California and New York landlords are partially responsible for that for the reasons mentioned above. The financial industry is moving away from the northeast to the south, primarily Florida, Texas, and the Carolinas. High rents, taxes, and property prices make people and businesses run away.
- nxm 4y ago
  Property taxes,income taxes, fuel taxes, high utilities costs all limit growth of prices in blue states.
  - formerkrogemp 4y ago
    On the flip side, "red" states are seeing rapid population growth from climate and economic migration, so inflation is high for low wage earners in the low cost of living areas. We're probably going to see a smaller range in costs between LCOL and MCOL than we have recently.
    - briandear 4y ago
      Nobody is migrating to Texas over climate.

tyjen 4y ago

House price fluctuation is still local market dependent. People who purchased overpriced, new mass developer homes in saturated newer markets may suffer a contraction. Areas with supporting high demand, low inventory, and inability to develop newer properties will maintain increasing valuation, but not at the same rate. A savvy home flipper can still make money, it's just harder to do so with increased competition in that area. This isn't a repeat of the 2008 financial crisis, in which financial institutions overloaded on mortgage-backed securities fueled by easy access mortgage loans without thorough loan application vetting. The deluge of foreclosures isn't likely to occur and people are likely to hold onto their houses and maintain firmer home prices during this slowdown.

Kon-Peki 4y ago
> Areas with supporting high demand, But most people think that this is an accurate description of their local market, and I'm not so sure that it is.
- tyjen 4y ago
  Most people don't know how to evaluate a market and are more short-sighted than they want to admit to themselves. It's reflected within entrepreneurship too, with ~50 percent failure within 5 years. Seattle: Severely limited land area mass surrounded by water with robust business sector. Single-family homes will become rarer across time with local pushes to develop multi-family domiciles. And, if you buy waterfront, your security increases substantially. Colorado Springs: Mountains impede development slightly with large military presence, but you can build suburban developments for as far as the eye can see in most directions. Prior to a slowdown, people see prices increasing and apply it too strongly to future results. But, one of these areas will be far more insulated from price fluctuations than the other.

m0llusk 4y ago

It is an amazing contrast with the situation when I was younger. House prices were bounded by wages and were understood to be depreciating assets. That is, without constant investment they lost their value and became unusable and difficult to trade. Even in the best of times it takes time, preparation, and fees to sell real estate. Landlording was a rich person's game because of the risk involved and if you really wanted to make money it was expected that any properties to be rented should be fully paid off because of the slim profits and high risk of damage to the property. The whole idea of fearing loss of value was completely different: Nowadays houses are bidding chips and people want to make the numbers go up to feel rich. In the past sharp losses of value meant the area was no longer desirable so that people were not moving in and so wages would no longer support prices in that area. Either things were modest and relatively stable or unstable and sinking. The current attitude toward housing is based on the recent explosion of house prices which is driven by financialization, extremely low interest rates, and demand outpacing supply where there are jobs. Economic, political, and demographic changes are very likely to wipe all of that out in a relatively short period.

endisneigh 4y ago
What area are you referring to where housing was understood to be a depreciating asset? Though that’s true in the literal sense, there are only a handful of instances in American history where they was empirically the case. Not to mention you don’t specify a locale which is the most important thing in real estate, heck, these days perhaps a neighborhood.
- smt88 4y ago
  In much of the North and Rust Belt of the US, houses declined in real dollars between the heydey of the mid-20th century and now. Detroit is a good example.
  - hiptobecubic 4y ago
    Ok but didn't Detroit like... collapse? Not every city is an economic monoculture of an industry that was offshored.

gfrff 4y ago

One of the differences is you c can liver in the investment. This means either not paying rent or collecting rent. The appreciation might be lower than the stock market but dividends are less than rent too.

nxm 4y ago

Easy way to save money when selling a home is to just sell it yourself. Real estate agents are, imho, one of the most useless professions. All you need is a real estate attorney, which you’d need one anyway.

coldcode 4y ago
I just sold my house for a ridiculous number. My realtor got 50 people to tour the house in a single weekend, and 5 places offers and I took the one 10% over the asking price. It's not a mansion or anything, and not in some high tech city, but nice area and a bit of land. The 6% commission is not really that much. Just prepping the house took all of my energy; trying to do marketing as well would have been too much. Like many things you can do everything yourself, or contract to others to do the things you are not good at, or don't have time for. Arguing realtors are useless is like saying accountants are useless, or lawyers are useless. I also did not re-roof my house. But of course you could get terrible accountants, lawyers or roofers, and you could possibly be terrible at stuff yourself. Some people think programmers are useless and some are, but that's not sufficient to try writing it yourself if you aren't one.
- jaclaz 4y ago
  >The 6% commission is not really that much. Sure, because you (or your agent) managed to sell 10% more than asking price. Try re-evaluating this 6% if all offers were 85-90% of asking price, and confirm that it is not really that much.
  - matsemann 4y ago
    But who determines the asking price? Not hard to claim success if the realtor themselves sets the bar.
  - hiptobecubic 4y ago
    They're saying that that's the whole point of the realtor. Obviously hiring a crappy realtor that can't find buyers that actually want your house is bad.

ryanmercer 4y ago

We bought our house about 20 months ago, the guy bought it at auction for about 50k and sold it to us for 179k (and now it's worth 230-245k because of the past 2 years) after having flipped the one across the street soooo, I mean...

ashalhashim 4y ago

“Between 2006, the peak of the previous housing bubble, and 2019, average home prices have increased just 13%, according to the S&P/Case-Shiller Home Price Index. In that same time period, the S&P 500 rose 125%. In other words, stocks did 10 times better than real estate” I can’t take an article seriously when it purposefully ignores what’s happened in the last three years because it negates the point it’s trying to make.

foobarian 4y ago
Weasel words. Should have said "In other words, stocks did 10 times better than real estate... if you bought and sold at those exact times". It's easy to cherrypick these high and low marks to prove whatever point you need.
jfk13 4y ago
The article is dated 2019, so it's not a case of "purposefully ignores what's happened"; the last three years hadn't happened yet!

jacknews 4y ago

The problem with this argument is rent. If you can buy a house (to live in) without a mortgage, or with a very low rate, you not only reap the capital gain, but save on paying someone else rent.

sys_64738 4y ago
Generally a mortgage is finite then you own the asset whereas rent is infinite with no asset afterwards. I don't get the reason others buy or rent but for me it's all about owning my home with mortgage payed off ASAP. The last thing you want going into retirement is paying for a place to live.
briandear 4y ago
You pay the government rent in the form of high property taxes. It’s insane that you can never actually own your house. Taxes should be based on consumption, not income, or simply existing.
- jacknews 4y ago
  Actually, although it makes complete sense to own land rather than pay rent in perpetuity in our current economic system, it is also totally unjust. The land belongs to all of us, like the air. Allowing individuals to own it, and especially to bequeath it, is the root of many of our problems,

nimbius 4y ago

as someone in and around professional tradecraft its always burned my ass to watch a husband wife couple buy a slab on grade clapped out flophouse with structural failure, pump $2200 worth of cheap contractor fixtures bathtub inserts and granite counters into it, and demand triple its price before it falls into the earth and their overleveraged low interest loan blows up an already teeterng market.

findthewords 4y ago

Demand-side economics: Low mortgage rates create a shortage of affordable housing by increasing demand. For example: -Speculators buying things and selling them for higher price later, that is a rational thing to do. -Normal folk who simply want a home rarely think long term, 50 years into the future, during which rates may vary and only look at what they can afford to pay monthly, right now. In a high interest rate, high inflation, high wage growth world houses are a BAD INVESTMENT because of erosion of value by inflation. What happens to bad investments? Their prices collapse, investors seek targets elsewhere. The only people who buy affordable housing in a high inflation environment are people who don't mind the deprecation in value and have a steady income to afford it.

fio_ini 4y ago

If you're gonna live somewhere between 2-5 yEars why wouldn't you buy so you can save money and build equity. Even with high interest rate... use this https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html https://www.nytimes.com/interactive/2014/upshot/buy-rent-cal...

jmyeet 4y ago

Whoever wrote this doesn't really understand what they're talking about. Side note: this is written in 2019. Can we update the title? First, terminology. "Flipping" houses has a completely different meaning. The author mentions buying a house and "flipping" it 5 years later. That's not what flipping is. Flipping is short-term and typically means rehabing a property. Done quickly, you can make a profit on this if you're good and can control your costs and keep to short time frames. People do pay a premium for finished products and/or just don't want to deal with the headaches of massive renovations. Second, the author makes the same mistake every pro-stocks author makes and completely ignores leverage and borrowing rates. 1-2 years ago you could get a 30 year fixed mortgage as low as 2.5% with an 80-95% LTV. Try getting that on any portfolio. Houses don't have margin calls either. Third, this was written in 2019. A lot has happened since then. The 2006 to 2022 housing situation is radically different. Fourth, the national average of house price growth over that period isn't really meaningful. This isn't stock-picking as the author alleges. Just narrow it to greater metro areas with low unemployment, a growing population (even modestly so) and relatively low state public debt (ie not Illinois) and the picture is radically different. Fifth, real estate tends to be a very good hedge against inflation. We're seeing that now. Inflation has skyrocketed and so has housing in the last year. That's not an accident. There are some systemic problems here but that's a separate topic. As someone who is trying to protect the real value of your assets, you only really care that it is could happen or is happening not necessarily why. Lastly, property tends to be much better at generating an income than any other asset class. Gross yields of 8-10% aren't that uncommon. Getting a dividend yield like that is going to be much harder and will have much greater capital risk.

metacritic12 4y ago
Absolutely agree with your analysis above. The econ of the article's analysis is rubbish. She compares indexes that exclude dividends, cherry picks time periods, doesn't seem to command basic econ understanding. There are lots of good reasons to critique house flipping, like she could have: - Given statistics on average returns of house flippers. - Show how naïve investors and flippers get burned. - Even a piece of ancedata about one couple getting burned is at least real news. But she doesn't do any of that.
4y ago

bluedino 4y ago

Think? During the last year they were doubling their money around here.

metacritic12 4y ago

Is CBSNews doing novel research in this article? It starts with reporting a survey on Americans' beliefs (specifically that they can make money flipping houses). This is fine and normal news. Then it transitions to novel research where the not-explicitly-questioned ground truth is "no: real estate flipping can't make money". How about cite some economists about bad future returns. Or at least some bank analysts? Instead, CBSNews's "analysis" that real estate doesn't make money starts with this gem: "Sadly, real estate is no better an investment today than it was in the previous century—and that's to say, mediocre at best. For people with a bit of money to put away, the stock market will almost always give the best return. Between 2006, the peak of the previous housing bubble, and 2019, average home prices have increased just 13%, according to the S&P/Case-Shiller Home Price Index. In that same time period, the S&P 500 rose 125%. In other words, stocks did 10 times better than real estate." The author assumes: - That returns to housing measured from the past peak is an unbiased estimate of housing returns. - That returns to stocks measuring up to today (one of the biggest stock bull runs) is an unbiased estimate of stock returns. - And that past returns from these periods will predict future performance. - To put the cherry on top, she compares two price indexes, not total return indexes. Dividends (rents) are totally excluded from the series. None of this is pointed out by the article itself, or even questioned. The most basic first-year-econ-undergrad mistakes are being made here. Which is unsurprising since this analysis seems like a journo LARPing as an economist to finish a writing assignment.

astura 4y ago

This article is extremely confusing. It's comparing stocks, a purely financial instrument, with a personal home that you live in and calling that "flipping houses." It's just all over the place and very surprising it's coming from such a mainstream publication. People mainly buy the houses they live in in order to have a place to live, full stop. Investment properties are a completely different concept and most Americans aren't involved in real estate investing whereas most Americans are involved in buying personal homes. It also totally makes sense people who are very unfamiliar with financial instruments (like young people) don't have any idea about what sort of return they have. Everyone's familiar with houses though - TFA says 2/3rds of Americans own their house. Like, duh, you aren't going to make money just buying a house to live in - If I sold my house at a big profit because the housing market overall increased I'd still have to live somewhere so my "profit" would just go into the increased cost of my new house and I'd be out closing fees and agent fees on both ends. I think a house you buy to live in is a bad investment and I own much more stocks than I have equity in my house. I've put thousands into my house in the last several months especially and it only seems to be getting more and more expensive every year I own it. I'm thinking I might have to reduce my monthly savings for the first time ever. However, I have to live somewhere and I like the security of owning my house and I like that I can customize it and nobody tells me I can't have cats. I have the money to pay extra for that. It's not an investment though, at least not a financial one.

astura 4y ago
Follow up to my own comment because I'm still baffled by this article that I keep thinking about it. I guess the article is based on a survey where the question was "For money you wouldn't need for more than 10 years, which ONE of the following do you think would be the best way to invest it?" and the top answer is "real estate." So yeah, that doesn't AT ALL mean that people who answer "real estate" think that the house that they live in will make them rich. Some might think that, but most people think buying an investment property means that the buyer will buy low and rehab it to flip or rent it to collect income. The entire premise of this article just doesn't make sense.

frankbreetz 4y ago

Flipping houses is not that different then building houses. If you buy a house that is not inhabitable make, make it habitable and sell it for a profit, that is value added to the economy and is a good career path. There are some people that take advantage of uninformed sellers buy a house cheap and put some paint on it and mark it up significantly, but there are bad people in every industry. This paragraph makes it sound like a hit piece: >>Between 2006, the peak of the previous housing bubble, and 2019, average home prices have increased just 13%, according to the S&P/Case-Shiller Home Price Index. In that same time period, the S&P 500 rose 125%. In other words, stocks did 10 times better than real estate. -Seletivly picks a period of the biggest housing crash in history and there is still increase. -that would be the amount it increased with no value add. -if you buy, hold, and rent you will make significantly more. If you are talking a 13 year period you are probably doing this. You buy with mortgage, have tenants pay mortgage, mortgage gets paid off plus profit. This stat leaves of monthly profit plus the fact you only had to 20% down, so you cash on cash return of just appreciation is closer to 75%. Also about 30% of your mortgage would get paid of if you had a 30 year mortgage, and almost all of a 15 year mortgage. Real estate can grow with cpi and still be a good investment. You just can't be leech and have to add value to the economy. I.e Let some live there and build improvements. It is more hands on,but definitely better returns then the stock market.

Joel_Mckay 4y ago

Las Vegas was built on the irrational ambition of gamblers, and on average every visitor still loses to this day. However, there are some rules about Dirt that have held for a few centuries: 1. “30% rule”: if your principle+interest+tax payments exceed 30% of your income for the duration of the debt, than your family will always remain poor and unlikely understand why 2. “200 month rule”: a holdings true worth is only what can be extracted from renting it for 200 months... the rest is 100% BS... 3. “Check regional population trends age profile”: Most speculative investors understand there is a >17% population decline happening over the next decade, and will focus on urban centers for risk mitigation. In my opinion, inner-city senior care homes are a good investment for the same reason. 4. “Never trust anyone not legally obligated to respect your interests”: Make sure a bonded financial-adviser fiduciary type appropriate to your needs is signed on with your legal representatives. Opinions from Bankers, random investment advisers, and golf buddies can have ulterior motives (toxic assets, TV hyped pump-and-dump scams, and cult stock-swarming scams). Dirt backed holdings are not what most people assume, and watching the equity get clawed back by banks again never ceases to amaze. The real insult was the 3 million foreclosed American homes still making payments in the last credit-crunch, reacquired with taxpayer bailout money, and then rented back by wall-street funded holding firms to the same families at another address. No one went to jail, nothing changed legally, and like any successful con it will likely happen again soon.

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