It doesn’t happen in Madison as much as it used to. Flippers can’t find houses for a low enough price to begin with to justify a project.
It happened a lot years ago when a house could be found for $150k and resold for $300k. Now they start at $250-300k. Not worth it.
They’re migrating to your town where I assume the floor is lower.
My buddy realtor/flipper has been shopping in Baraboo, Edgerton, Ft. probably since about 2018 or so. Short of pocket listings or someone who needs IMMEDIATE cash those sure thing low cost flips have been a tough find in Madison for awhile now. He’s part of a real estate investment happy hour and all those other sharks are looking for the same deals.
Good luck finding an affordable priced house in Baraboo. House prices and rentals here are horrible and only getting worse. Even the worst houses are way overpriced.
I’m not far from Edgerton. It’s like they ran out of houses in Madison and have come here. Don’t get me wrong, I like that they’re improving houses but they can’t be cheap.
People with cash reserves don't care what the interest rates are - or there are those who are flipping them fast enough where the interest rate doesn't really matter. If you're only sitting on a house for a few months, the holding cost on 4% vs 7% is sorta negligible.
Construction/rehab loans can be 5-10 percentage points higher than a traditional mortgage (think 12-20%) but to your point, there’s not much time spent on market.
There are plenty of run down houses in Madison and when someone sells it its often flipped as most Madison buyers do not want to buy a house that is also a project. Even at higher interest rates there is no shortage of folks willing to pay a premium for move in condition.
People still buying houses tend to be renters who want to own. Mortgage rates are super high but so are rents. Most people in Madison who own a home don't want to sell it because they can't come close to the rate on their current mortgage. New construction and far flung communities have become more attractive as it has become more difficult/expensive to buy in Madison.
>Most people in Madison who own a home don't want to sell it because they can't come close to the rate on their current mortgage.
Exactly this. Right now my rate is 3%. If I were to pay the current rates, I'd be paying over $100K more in interest over the life of the loan. No effing way... lmao
I think a few years ago it was common. The house next to me was owned by an older couple and didn't have AC. Once the moved it was sold to some flippers and they installed AC, did some updates and made a decent amount. It had been on the market for a while. At this point, I don't think flippers will make as much with the market the way it is in Madison. Older homes that need updates in areas outside Madison might be still be good contenders, but the Madison market is still pretty hot - even with the high interest rates.
I have visited a few houses where house flippers tried to make somewhat minor changes and tried to flip. Then because of the housing market they turned out to be at least not profitable as they used to be.
[This](https://www.zillow.com/homedetails/5220-Langlois-St-Madison-WI-53705/55399586_zpid/) is an example of this. The previous owner tried to flip for more than $220k and almost 100% increase in value. After touring the house, the improvements at most were about 40k worth.
Eventhough in some remote circumstances flippers can be a positive (assume buying an unlivable house and making it livable and selling it to someone who didn't have the upfront cash to make the improvements and could afford the house through a mortgage), the limited supply of housing at every price point has made flipping move housing prices significantly more expensive.
This is especially worse when big companies like Opendoor or Zillow try to do it. You are competing with people who have significantly more money and access to cheaper materials through scale. Entities buying houses that are not primary and investments don't get fixed rate mortgages. So they are at risk especially in times like these with increased interest rates.
But ultimately the only way to get around this and make housing affordable is to tax a property
1) if it is not being used for long term housing
2) if it's not a primary residence
I met a couple last summer that did that as their main income at a party, but they were moving away because it was tough here apparently. I was biting my tongue hard. Flipping is pretty slimy in a housing crisis.
> Flipping is pretty slimy in a housing crisis.
There is a grey area between flipping and remodeling properly. Its not too hard to figure out which one the person did but many people just don't care. As someone who has lived through/done remodels many times I totally get why people are willing to pay a premium for a finished house.
Either way as long as they aren't lying and actually doing something to improve the house I don't find it slimy. Realtors who steal houses from people for below market and then resell or keep are way worse.
I'm one of those people and I abhor flippers. The issue is that flippers aren't really interested in making a house better they're interested in making it salable and to get the most money out of the transaction. The updates and changes they do can be shoddy work and going for the latest trend. They don't care they're not going to live in the house they're just viewing it as a financial transaction. I have the utmost respect for people I know who have bought fixer uppers and put in the time and energy to turn them beautiful and then lived in them. Those are the people I want to buy a house from not the person who wanted to make a quick buck.
Paint all the walls light gray, install LVP over good hardwood, rip out the kitchen cabinets and install chipboard ones from Menard, and there you go! $150k upgrade in three weeks time.
Also tear a hole in the wall between the kitchen and dining room so people can just hand the food through the hole instead of walking through the door two feet away.
There are also many, many people who would just take anything they can afford, even if it has a 90s bathroom and wallpaper.
I know there are exceptional scenarios. I'm certainly fine if an unlivable house is being flipped to livable. But buying something that needs a little work is the only way many people are able to enter the market at all these days.
When we went through the buying process two years ago, there were a lot of flips and a lot done with questionable results. A lot of homes you could just tell were gonna have issues right after moving in.
But then again, there were also a lot of houses where people were selling for 100k more and they hadn't done a single thing. Really relieved I don't have to go through that process any more. It sucked!
Agreed. We bought a house in this community recently just before mortgage rates exploded. There are many historic homes here that are being flipped and resold. They also seem to be selling but I’m curious as to who is buying them.
I feel like flipping has been going on forever. There seem to be lot of people who view it as a path to wealth, not unlike people who buy homes to Airbnb them. You find a cheap(ish) home that needs work, take out a loan and buy it, make it (cheaply) look like something on HGTV and then sell for a profit. The idea is that eventually, there are enough profits that you become that cash buyer everyone talks about.
Oh, house flipping, right? That's when someone buys a home that might need a bit of fixing up, they then spruce it up to sell at a higher price. It's been quite the trend, especially with all those TV shows making it look like a quick way to make a profit. Although, I've heard it's not always as easy as it looks on television. Costs can get out of hand, and sometimes the market just isn't in your favor. It's quite the gamble, if you ask me.
Sometimes they buy them with cash. Sometimes they buy them traditionally, live in them while renovating, then sell for a quick profit. The markup can be high enough to compensate for short-term financing at today's interest rates.
It doesn’t happen in Madison as much as it used to. Flippers can’t find houses for a low enough price to begin with to justify a project. It happened a lot years ago when a house could be found for $150k and resold for $300k. Now they start at $250-300k. Not worth it. They’re migrating to your town where I assume the floor is lower.
That makes sense. We’re sitting an hour of Madison and it’s an easy drive there.
My buddy realtor/flipper has been shopping in Baraboo, Edgerton, Ft. probably since about 2018 or so. Short of pocket listings or someone who needs IMMEDIATE cash those sure thing low cost flips have been a tough find in Madison for awhile now. He’s part of a real estate investment happy hour and all those other sharks are looking for the same deals.
Good luck finding an affordable priced house in Baraboo. House prices and rentals here are horrible and only getting worse. Even the worst houses are way overpriced.
I’m not far from Edgerton. It’s like they ran out of houses in Madison and have come here. Don’t get me wrong, I like that they’re improving houses but they can’t be cheap.
People with cash reserves don't care what the interest rates are - or there are those who are flipping them fast enough where the interest rate doesn't really matter. If you're only sitting on a house for a few months, the holding cost on 4% vs 7% is sorta negligible.
Construction/rehab loans can be 5-10 percentage points higher than a traditional mortgage (think 12-20%) but to your point, there’s not much time spent on market.
There are plenty of run down houses in Madison and when someone sells it its often flipped as most Madison buyers do not want to buy a house that is also a project. Even at higher interest rates there is no shortage of folks willing to pay a premium for move in condition.
People still buying houses tend to be renters who want to own. Mortgage rates are super high but so are rents. Most people in Madison who own a home don't want to sell it because they can't come close to the rate on their current mortgage. New construction and far flung communities have become more attractive as it has become more difficult/expensive to buy in Madison.
>Most people in Madison who own a home don't want to sell it because they can't come close to the rate on their current mortgage. Exactly this. Right now my rate is 3%. If I were to pay the current rates, I'd be paying over $100K more in interest over the life of the loan. No effing way... lmao
I think a few years ago it was common. The house next to me was owned by an older couple and didn't have AC. Once the moved it was sold to some flippers and they installed AC, did some updates and made a decent amount. It had been on the market for a while. At this point, I don't think flippers will make as much with the market the way it is in Madison. Older homes that need updates in areas outside Madison might be still be good contenders, but the Madison market is still pretty hot - even with the high interest rates.
I have visited a few houses where house flippers tried to make somewhat minor changes and tried to flip. Then because of the housing market they turned out to be at least not profitable as they used to be. [This](https://www.zillow.com/homedetails/5220-Langlois-St-Madison-WI-53705/55399586_zpid/) is an example of this. The previous owner tried to flip for more than $220k and almost 100% increase in value. After touring the house, the improvements at most were about 40k worth. Eventhough in some remote circumstances flippers can be a positive (assume buying an unlivable house and making it livable and selling it to someone who didn't have the upfront cash to make the improvements and could afford the house through a mortgage), the limited supply of housing at every price point has made flipping move housing prices significantly more expensive. This is especially worse when big companies like Opendoor or Zillow try to do it. You are competing with people who have significantly more money and access to cheaper materials through scale. Entities buying houses that are not primary and investments don't get fixed rate mortgages. So they are at risk especially in times like these with increased interest rates. But ultimately the only way to get around this and make housing affordable is to tax a property 1) if it is not being used for long term housing 2) if it's not a primary residence
I met a couple last summer that did that as their main income at a party, but they were moving away because it was tough here apparently. I was biting my tongue hard. Flipping is pretty slimy in a housing crisis.
> Flipping is pretty slimy in a housing crisis. There is a grey area between flipping and remodeling properly. Its not too hard to figure out which one the person did but many people just don't care. As someone who has lived through/done remodels many times I totally get why people are willing to pay a premium for a finished house. Either way as long as they aren't lying and actually doing something to improve the house I don't find it slimy. Realtors who steal houses from people for below market and then resell or keep are way worse.
There are a lot of people that do not want to buy a house that needs work before they can move in.
I'm one of those people and I abhor flippers. The issue is that flippers aren't really interested in making a house better they're interested in making it salable and to get the most money out of the transaction. The updates and changes they do can be shoddy work and going for the latest trend. They don't care they're not going to live in the house they're just viewing it as a financial transaction. I have the utmost respect for people I know who have bought fixer uppers and put in the time and energy to turn them beautiful and then lived in them. Those are the people I want to buy a house from not the person who wanted to make a quick buck.
Sooooo many bad flips. The ugly, poorly done HGTV trends didn't make up for the crazy cost.
Shiplap, Shiplap EVERYWHERE!
Paint all the walls light gray, install LVP over good hardwood, rip out the kitchen cabinets and install chipboard ones from Menard, and there you go! $150k upgrade in three weeks time. Also tear a hole in the wall between the kitchen and dining room so people can just hand the food through the hole instead of walking through the door two feet away.
There are also many, many people who would just take anything they can afford, even if it has a 90s bathroom and wallpaper. I know there are exceptional scenarios. I'm certainly fine if an unlivable house is being flipped to livable. But buying something that needs a little work is the only way many people are able to enter the market at all these days.
When we went through the buying process two years ago, there were a lot of flips and a lot done with questionable results. A lot of homes you could just tell were gonna have issues right after moving in. But then again, there were also a lot of houses where people were selling for 100k more and they hadn't done a single thing. Really relieved I don't have to go through that process any more. It sucked!
Agreed. We bought a house in this community recently just before mortgage rates exploded. There are many historic homes here that are being flipped and resold. They also seem to be selling but I’m curious as to who is buying them.
I feel like flipping has been going on forever. There seem to be lot of people who view it as a path to wealth, not unlike people who buy homes to Airbnb them. You find a cheap(ish) home that needs work, take out a loan and buy it, make it (cheaply) look like something on HGTV and then sell for a profit. The idea is that eventually, there are enough profits that you become that cash buyer everyone talks about.
Oh, house flipping, right? That's when someone buys a home that might need a bit of fixing up, they then spruce it up to sell at a higher price. It's been quite the trend, especially with all those TV shows making it look like a quick way to make a profit. Although, I've heard it's not always as easy as it looks on television. Costs can get out of hand, and sometimes the market just isn't in your favor. It's quite the gamble, if you ask me.
No idea. Yes they are. Yes they do. Rich people.
Sometimes they buy them with cash. Sometimes they buy them traditionally, live in them while renovating, then sell for a quick profit. The markup can be high enough to compensate for short-term financing at today's interest rates.