I’m dying to understand why there is so much hostility to “flipping homes.”  The attitude here is as if it was an illegal practice or somehow dirty.  Someone please clue me in as to why that makes you a bad person. 

We sold our condo in Turtle Ridge in 2006.  When my fiancé and I bought it in 2003, I was 29 and working my tail off trying to pay my law school loans, car payment, etc.  I don’t think I even really knew what “flipping” was.  Honest to God, it was never our initial plan to only have the place for 2 years and then sell.  But then we realized, how could we not?  We only put 5% down and sold it for more than double the price.  We were able to pay off our student loans, car loans and credit cards.  This is what allowed hubby and I to buy the 4 bedroom in VoC.  We have no plans on flipping it.  We plan to stay a LONG time and have fun improving it, decorating and watching the area develop and maybe have some kids.  None of this would have been possible without the sale of the condo.  How else could we have ever made that kind of money TAX FREE?  So why such ill repute?

hbunny-
Duck and Cover!
SCHB

That’s just what I mean.  But WHY??????  I want to understand the mentality.  Wouldn’t you be happy if you, a friend or family member made money on a house sale? or is there some philosophical reason against making money on real estate?

hbunny, that’s great!  nice to hear a good success story.

similar situation, 2004-2006 for me.  now i rent and am loving it.

hbunny, i think the "love" we give to flippers are for those that buy and sell within like 6 months (I would consider anything less than 2 years a flip, because you’re eating the capital gains tax).  where it’s just so obvious that they’re trying to take advantage of market conditions.

The "love" becomes even more hostile when they price their properties like idiots.

Thanks fk 123 - I appreciate your comment.  So, according to you, selling in 2 or 3 years is not really considered a "flip" and your explanation makes sense to me.  Thanks.  It still seems that people are very hostile on this site…My girlfriend put it in a funny way, "oh, you waste your time on the "haters" blog.  Yes, but only when I’m bored at work.

hbunny,
You make a valid point that not all those who "flipped" are "flippers."  You sort of backed your way into it (I, for one, am jealous).  You also don’t fit the mold for a "flipper" because you (presumably) can afford what you bought— unlike those relying on appreciation—and you didn’t buy looking to make a quick buck.
But I believe most people posting here don’t have real animosity toward true "flippers," but more a sense that they are getting what they deserve.  What will they get?  A notice of default when their equity evaporates.  There is no sympathy on this forum for the pain flippers are already enduring (and which will get much, much worse in the near future).  I think the hostility you are picking up originates from the theory that flippers/speculators + ultra easy credit so inflated housing prices that average folks can’t afford to buy in the OC.  That makes a lot of people angry as they have been priced out of the market.
Then there is the envy issue.  I’m envious of your 2003 - 2006 "flip."  A lot of people who manage their money intelligently decided not to jump into the market in 2004 - 2006 even though they could easily have been approved for a loan.  They had good reasons for refraining (which I will not list here—beating a dead horse, you know).  Then they see their fiscally irresponsible ________ (fill in the blank: neighbor, relative, co-worker, etc.) make BANK by buying something they couldn’t afford (after the ARM reset, that is) and then flipping it to a greater fool.  Some might argue this was a brilliant investment, I would say it was dumb luck for a lot of people.  For those of us who drive economy cars by choice (sure, I could lease a 7 series, but I don’t because it is ridiculous), we will take great (if immoral) pleasure in watching Joe OC lose his house, Hummer, dirt bike, wave runners, and hopefully every item of clothing with flames on them.  Sort of the ultimate come-uppance.

Holding on to the home for 2 years isn’t much of a flip.  People around here buy a home and sell it within a week for a large markup, even though they did nothing to improve the home.  It’s just like ticket scalping and is just one of many shady things that keep home prices artificially high.

skeptic’s last paragraph is where we got the name "bitter" renters.
Some of that label is deserved.  Most are bitter not because they couldn’t buy, but because being more fiscally responsible (not diving into a market that showed signs of being overheated) was not financially rewarding.  But some of the bitterness is justified.
SCHB
 

hbunny,

In a normal real estate market, flippers perform a valuable service. Generally they buy dilapidated properties, fix them up, and sell them for a profit. However, once prices started rising, flippers simply came in, bought houses and resold them for a higher price. They performed no value added function.

Imagine if you had found the perfect home and some flipper outbid you for the home. You would either have to pay more or walk away. This person has no interest in living in this home, they only want to make you (or someone like you) pay more for it so they can make money. These bidders in the housing market only serve to increase prices. It is the same reason day traders were so reviled back in the NASDAQ bubble.

There are always people like yourself who simply got lucky with the timing of the circumstances of their life and made money in the housing market. There will be a great many recent buyers who will not be so lucky. Greed will be the undoing of most flippers. When investing in a Ponzi scheme you have to know when to exit the market or you become a bagholder. It is like shooting craps. You need to let your money ride to make money during a streak, but you need to pull it off the table if you want to keep any of it. All the flippers and specuvestors who bought properties simply because prices were rising and going to be left holding declining assets. They won’t be happy about it, and many will take pleasure in their misfortune.

many will take pleasure in their misfortune.
Impossible. 

I tend to agree with Irvine Renter above -
My growing family really needs a new home… but to a degree, I am at the mercy of individuals that have no intentions other than trying to make a fast buck - which has the effect of screwing me and my family over in our bids to find a nice home in Orange County.  It also doesn’t help that most of these flippers are adding no value to the home - they buy a brand new home (in many cases) and seek to sell it as soon as the one-year no competition clause expires.  To me, that type of person is little more than a carpet-bagger…
Just wanted to add - I don’t get upset in Vegas when I lose and another player wins… its gambling and entertainment.  I don’t get emotional about my investments… and I can shift them around at will.  For me, having a good home for your family is not a matter of entertainment, and its not a matter that lends itself well to a change-at-will.  This is probably why people get so mad at flippers… the environment that they contribute to hits far too close to home.

I’ve got flipper envy just like everyone else, but really, are they a cause or more of a symptom of rising prices? If they ride the market and make easy money I’ll be a hater, sure. . . but to say they are causing the high prices. . . can someone show me how that can be true here? In theory, when they have to sell, they are adding inventory to the market and having to compete—making them have to have to lower prices.

IR, as far as the sadistic aspect of watching them go down in flames, I’m with you there. I also can’t wait for so many of the overspenders to get righteously checked when they lose the house etc because of arrogance. It seems a little mean, but really, they said yes to anything and everything. Plus, that is when you will become IrvineOwner. Cheers to that!

hbunny, this has nothing to do with your question, but i am very curious.  in your first msg, you mentioned your husband.  in a subsequent msg on this thread, you mentioned your girlfriend.  so which parts of your story are true and which parts are fabricated?

now that i reread the msgs, i see you could be referring to a friend that is a girl.  it’s monday morning and i am a little slow.  sorry.

I don’t know, i’m a flipper myself. I don’t do alot of the get rich quick schemes, I mainly buy properties (houses/apartment duplex, triplex, complex) that are in need of fixing. Sometimes its a gold mine, sometimes not so much. My best and worst ALWAYS stick out in my mind.
Worst:
I bought a nice little duplex in Newport, one family moved out, the other did not. I thought I would come in clean, update, a few renovations and make a moderate profit (it was WAY underpriced). Well it turns out the inspection was bogus. This is the SHORT list of what was bad….
1. Roof
2. Termites in Center Wall
3. Structural damage
4. Mold
All in all, the damage was over 120k near 130k (just slightly UNDER my maximum profit margin). When everything was said and done I managed to squeeze out $5000 in profit. The RE agent made A LOT more money than I did. I’m just tankful I was able to be positive on this deal and it tuned out to be a BEAUTIFUL residence.
Best:
Well I purchased a very pretty but quaint 3-plex near crystal cove. It was smallish, but your back yard was the pacific! The rent was insanely high, but I managed to find renters who wanted such a place. The mortage to rent was almost negtative and it would have stayed that way for another year or so. BUT a "lovely" large RE company started a eminent domain proceeding against me. It seems that their 100+ units at 650+k(lowest models) needed more parking to be up to the regulation. My measily 50-60k in taxes weren’t much when compared to the multimillion dollar tax base was nothing. I did negotate a better selling price but it was unpleasant to think somebody was taking away something that you owned for the "greater" good.
I don’t appreciate people who buy for the 3 less months or less with very little sweat equity. I think that its lazy and you’re just making money off of good people who deserve a decent home to live. Don’t even get me started on these scum bags to buy property just to let it go into default. <anger>
My theory is to always UNDERPRICE your property, it will sell, the deal is to make the deal, not squeeze every last penny out… that’s just greedy and its not worth the effort.  If everybody walk away with something, (in theory) then everybody will be happy.
Anyway good luck and I hope things work out for you.
-bix

Hbunny:

Congraduations on cashing out in 2006!  It was a difficult year to sell a home.  I was able to unload a condo last year only after reducing the selling price by $50k.  Ah well. 

We live in a fairly capitalistic, competitive society that rewards hard work and successful risk taking.  You worked hard to get through law school, and thus your salary level is higher than a cashier at Walmart.  You took a big financial risk and bought a home in 2003 when others held back.  And in 2006 you’re rewarded with a tidy profit.  There’s nothing wrong or illegal about it.

People who buy 1 home at a time and lives in it, probably shouldn’t be classified as a RE investor or flipper.  I think RE investors are more like people who buy-to-let, which increases the overall supply in rental market.  Some people dislike RE investors because they accuse them of driving up prices and maintaining demand, which prevents/delay the RE bubble "pop".  They want to see a crash and not a slow soft-landing.

soul brother,

its true that you could say flippers are helping the bear market as much as they contributed to the ride up.  they may be more desperate to unload properties than someone who bought their home to live in and aren’t relying on price appreciation to afford the investment.  in this case they might have no effect on prices over a long horizon, say 10 yrs.  but in the interim there will be huge short-term volatility and i’m sure most would agree that volatility is not something we want to see in housing prices.

Patrick summed it up better than I was able to articluate in my earlier post:
"If you’re a responsible saver and you want to buy a house, you’re bidding against these crazy people who are either gambling or lying (about income on their mortgage application) or just not understanding that they shouldn’t be borrowing ten times their income. So, the thing that bothers me is I have to bid against them for a house. And now Congress is saying let’s bail out these irresponsible people. No! It’s another way of propping up an ultimately unsustainable housing market. Let the market work."
Here is the link.
http://www.bankrate.com/brm/news/mtga/Apr0507_mortgage_analysisa1.asp?ref=patrick.net
SCHB

Wow - Ohio is willing to pass 100 million in municiple bonds to bail all of these people out (as a starting point)... makes me wonder what Taxifornia would do…  hostility?  Why would I be hostile?  Face a tax increase (yes, bonds are an increase) to pay for some of the people that priced me out (of my comfort zone)?  Sure!  Want my shirt, how about my pants while your at it?  Wasn’t there a great Looney Tunes line about, "if you can’t beat’em, join ‘em?"

GUIR,
   I can’t imagine all these people who schilled thier way into fortune getting a hand out of their mess they created….
sheeesh!
-bix