Our bear rally is bringing out the flippers. Will they turn a quick buck? or will they get stuck with overpriced properties due for another fall?

Asking Price: $875,000

Address: 11 LAURELGLEN Irvine, CA 92614

Remember when you were young, you shone like the sun.
Shine on you crazy diamond.
…
Come on you target for faraway laughter,
come on you stranger, you legend, you martyr, and shine!
You reached for the secret too soon, you cried for the moon.
…
Come on you raver, you seer of visions,
come on you painter, you piper, you prisoner, and shine!

Shine On You Crazy Diamond — Pink Floyd

Some people get worked up about property flippers and some do not. Some flippers improve properties and make money through creating value (I am talking about real improvements, not pergraniteel).

Personally, I think flippers who buy properties, do nothing to them, and offer them for sale at higher prices are leaches sucking the value from the housing market. Every penny of profit those flippers make comes at the expense of a normal family that might have save money buying a house. I have reserved a small measure of schadenfreude for these idiots as the market crushes the money out of them.

Yesterday, when I wrote about short sales, I talked about the flippers who are buying at auction. Those flippers are at least providing market liquidity, so there is some value in the service they provide. Flipping an auction property is a profit opportunity even in a declining market because the strategy obtains real estate for under current market value (like today’s featured property).

People who flip in the open market simply rely on increasing prices to make money. Now that our bear market rally is in full motion, flippers are trying their luck again….

It makes me all tingly inside to think about how much some of these flippers are going to lose. And this time, it will be their equity rather than funny-money from the bank.

Are you happy to see flippers active in our market again?

Asking Price: $875,000

Income Requirement: $218,750

Downpayment Needed: $175,000

Purchase Price: $690,000

Purchase Date: 7/27/2009

Address: 11 LAURELGLEN Irvine, CA 92614

Equity Seller. This is not a REO or short sale. Corporate Owned.
Turn-key home. Bring your pre-approved buyers and close fast. Great
oppurtunity to get into Landing II, which is one of the most sought
after neighborhoods in Woodbridge. Woodbridge has been named The best
place in America to Raise a Family by Parent’s Magazine and the #1
Planned Community in the Country. Private Cul de Sac location, great
for families. Recent upgrades include casement windows, travetine
flooring,distressed Spanish Hickory hardwood flooring,entertainment
center in family room,custom built child’s bedroom with bunkbed and
cabinets (must see!),plantation shutters,above ground spa (sold in ‘as
is’ condition) recessed lighting,new carpet throughout, new interior
paint. Exterior will be painted prior to close of Escrow.

Corporate Owned? Yes, the corporation you formed to flip properties….

oppurtunity?

Take a good look at this sales price history. This is a mid-range property in one of the most desirable neighborhoods in Irvine that declined in value during a 6 year period.

If this property sells for its current asking price, the flipper stands to make $132,500 after a 6% commission. Not a bad deal if you can get it.

BTW, I have a major analysis post on Shadow Inventory coming out tomorrow. Here is a teaser statistic for you: 175,000 Orange County homes will go through foreclosure between 2007 and 2013. That is 40% of the housing stock with a mortgage. I will show you all the calculations tomorrow…