Tuesday, April 25, 2006

Bend House Flippers


Is it hip to flip Bend, Oregon Real Estate, or what? People are coming in and buying something to make a hundred gees, while folks like me who want to live here, vote here and support local vendors and charities, feel as if we're in the friggin' stock market..."sell sell sell Martha!"

Well, I guess it's not all Californians and New Yorkers who participate in the gamble, there are also a lot of locals who House Flip. In my opinion (and current financial situation), it's way too risky to flip. Call me a wussy, but I what I fear is: Underestimating the cost to remodel a shack. Falling in love with a shack that won't go anywhere. Overpaying for a shack. And, not fully knowing where or what the market is going to be like for my shack when I sell it.

Are any of you House Flippers? Any stories of success? Devastating failure?

21 Comments:

Anonymous Anonymous said...

No Guts, No Glory

April 25, 2006  
Anonymous Anonymous said...

Friend bought a dump (maybe 1000 sqft) for $150,000. Developer building around it ended up giving him $300,000 for it. This was all in about 4 months time.

I'm disgusted with the idea. But glad for him.

April 25, 2006  
Anonymous Anonymous said...

I think the only failure that I've seen was a family member selling too soon.

Right before the big push last year on the Westside they sold to move into a larger place. They made a profit, but not the quadruple profit they would've made if they stuck it out a little longer.

April 25, 2006  
Anonymous Anonymous said...

That's what's great about Bend. Your guaranteed to make money here if you buy real estate. I don't care what people have been saying last month. Guaranteed. 100%. No-risk. Buy the smallest shack for $700K and you can sell it for $900K a few months from now.

I have a couple client friends who each just bought houses in Febuary in a beautiful new sub-divition on the westside for a little under $500K - all they have to do is hold them a few months until the market takes off this summer and I think 20% would be a consevative return. I agree with the person above who says you shouldn't sell too soon. Every day you don't sell is equity in your pocket, good as in the bank acount. This summer the market will be slow in California so the investors are going to come here.

April 25, 2006  
Blogger Bend Economy Man said...

Can I show your button on my blog? There will be a full link and full credit, of course.

April 25, 2006  
Blogger Salmonberry Bend, Oregon said...

Absolutely Bubble Boy. This is your song. I mearly play the harp in this blues riff.

April 26, 2006  
Anonymous Anonymous said...

Hey "Flipper and Proud of It!!"

So what happens when the market tanks and those folks have maxed out their home equity and are stuck with a million dollar home that is only worth half that? Buying land used to be a sure thing when housing was affordable.

It's people like you we want out of this town. Take your Trader Joes and go back to Cali, why don't ya!

April 26, 2006  
Anonymous Anonymous said...

What happens when market tanks??? Simple answer - it won't. There has never been the demograpics like Bend has today, fastest growing county in the USA, so much money no one can beleive it.

People say "can it keep gonig up?" and the answer is yes. So many rich people moving here. Movie stars, profesional athletes. Sorry if you dont like it, but get used to it....... Bend has a past and a future and this is the future.

April 26, 2006  
Anonymous Anonymous said...

Flipper and Heather are tossin' the gloves off!

(now lets go to commercial break)

The only Ship that doesn't sink is friendship.

(back to the match)

Flipper is dancing around the ring taunting the crowd.

April 26, 2006  
Anonymous Anonymous said...

Thanks Flipper. Keep driving prices up so I can sell out at a nice profit and move on to greener pastures.

April 26, 2006  
Anonymous Anonymous said...

What about those of us who want to move there to live? My girlfriend and I are heading up in a few weeks to choose a house and buy it. Then we're going to rent it for 2 years before moving to Bend permanently (from Cali, obviously). But we have no interest in flipping. We're going to quit our corporate jobs with the goal of living less "competitive" lives in Bend. How do locals feel about people like us?

We're nice folks and looking to make friends and contribute. Entrepreneurship is definitely in the cards, but what exactly we have no idea yet. I just hope that at least some of the folks coming to Bend are like us -- essentially hating what Hollywood and LA, San Francisco, etc are all about. I.e. extreme materialism.

I went to college in a small-ish town and am familiar with the dynamics of local politics; they resented those of us who show up, change the laws, and then leave after taking what we want. So I can relate, in a way.

I think the urban metropolis is a pressure cooker, and will always be driving certain folks away. These people will be drawn to smaller-but-growing cities that can offer things like high-speed Internet and a good toffe-nut latte.

Anyway I'm doing my research on Bend and for adults, anyway, it seems like a great place to live, despite the growing angst of locals as they see the city in danger of losing the familiar (and affordable) things that Bend used to be. Which is why I'm here...

If nothing else, hopefully I've managed to speak on behalf of decent non-flippers who are impressed with Bend and want to be a sincere part of it.

Cheers!

April 27, 2006  
Anonymous Anonymous said...

Hi Andrew,

It's not likely you are going to run into the California haters in your day to day routine. Truth be told, it's actually a pretty small group. 15 years ago Bend was a town of about 20,000 people. With the current population pushing the 80,000 mark, the fact is that most people in town are transplants. It's the grouchy "locals" that are the minority now.

I don't like how Bend has changed. However, I know that blaming the people that move here is a pointless exercise. Come one, come all.

April 27, 2006  
Blogger Bend Economy Man said...

Yeah, Andrew, like I posted on my blog yesterday, "as long as there are thousands of crazy dreamers in California willing to sell everything they have and move to Bend and take out high-risk loans and buy houses as fast as the builders can make them, the whole thing will probably keep humming along just fine."

So not only will Bend welcome you - Bend needs you.

April 27, 2006  
Anonymous Anonymous said...

Bubble, where have you gotten the idea that Californians are taking high risk loans? It's the Californians that are coming up here with hundreds of thousands in the bank from selling their homes down south. It's the locals trying to keep up or the investors buying two or more houses at a time that are putting themselves at risk.

I know a few people from California that sold their modest homes and came up here to buy a nice home with a large down payment and still had plenty of money in the bank. They probably would have been at far greater risk staying in California.

April 27, 2006  
Blogger Bend Economy Man said...

This comment has been removed by a blog administrator.

April 27, 2006  
Blogger Bend Economy Man said...

.


Chicken Wing -

Sounds like you know more newcomers than me, so I'll have to take your word for it that the Californians are all flush with equity and haven't taken out risky loans here.

Andrew said that he and his girlfriend are coming up here in a couple weeks to buy a house and then RENT IT OUT for two years while they wrap up their California lives. That means he's buying a Bend house before he sells his California house!

That's a risky financial transaction. First, the renting-out: rents are WAY below mortgage payments in Bend. Andrew's looking at two years of negative cash flow. Then, the buying in Bend before selling in California: essentially, that's a bet that BOTH markets will go up in the meantime. Because if one or both go down, it's gonna be tough to pull off.

But you can see why the Bend economy has stayed afloat: people are bending over backwards, taking huge financial risks, just for the privilege of pumping hundreds of thousands of dollars into the local economy!

What Andrew is getting ready to do is practically a gift to Bend. He will -

- take on a huge debt and use the money to buy a house from a local homeowner or developer,

- subsidize rent for a local resident, by accepting rent for lower than his monthly mortgage payment,

- spend 2 years not taking a job away from a local resident while sending part of his California salary to Bend in the form of a mortgage payment,

- arrive in Bend and either spend his own money or take on further debt to start a business (the "entrepreneurship" he mentioned),

- renounce his Californian materialism,

- AND, last but not least, bring another woman to a town that's a notorious "sausage party." Most guys arrive stag.

What town wouldn't welcome a guy like Andrew? He sounds great!

April 27, 2006  
Anonymous Anonymous said...

It's painfully obvious that "Flipper and Proud of It!!" is a delusional realtor.

The bubble will burst just like the tech bubble and the stock market and the boom in the 80s here in Bend.

April 27, 2006  
Anonymous Anonymous said...

We are all in the vast pond of this nation and any rock tossed in will ripple out to us. Don't care where you are, the question is the size of the rock and resulting ripple and how long before you feel it. Rising rates will have some impact, continue to expect moderate appreciation in the low teens for the rest of the year, (we saw 6.5% in meadian price appreciation in the first quarter. Further expect land to be scarce until we decide where our city is going to go, then "sell on the news", (investors make for a shakey market, they know when to cut and run and this creates a cascade). Back fill in 8 to 18 months with moderate to stagnant price appreciation, say 9 to 2% and increasing inventory.
Flipping is going to be more difficult with smaller returns if not simply due to price ceilings and the increasing number of players.( median sees 400k, i'll think 3 times ). If interest rates rise above 7 on "a" paper then 8 1/2 is not far out. Sustained Oil at 82 bucks a bbl, 4.25 gal. gas and we might just see the 8 1/2%.
So now we need Business!
As always, cash is soon to be king.
Warning though... nothing will make sense if a geo-political event occurs... that will be a big rock and the ripples will move at light speed. In this event, In 24 hours our world will be much different and all this will mean nothing. We will then re assess and and ask the dealer to deal!

April 27, 2006  
Anonymous Anonymous said...

Gotta be totally honest here. My girl is the one with the money, she's much more successful than I am. Here's what's going on:

She owns 2 properties in California. One is the house we live in. Another is a condo she rents out. She bought both of these properties years ago in her early-to-mid twenties. (We're both in our early thirties now.)

What she's doing is selling the condo, then taking that money and buying a house in Bend. She just sold the condo last week, so now is the time for us to come up and choose a place. This is all her game; I'm just offering my opinion on which house to go with.

This leads to the 2-years thing: there's a real estate law that says the owner of a rental property can essentially exchange one rental property for another, and avoid the substantial property tax on the purchase. The caveat is that the owner cannot live there (i.e. as a primary residence) for at least 2 years.

Another caveat is that she the house she buys in Bend has to cost at least as much as the condo. Which means that the Bend house will be like a mansion compared to what that same money buys in Los Angeles.

As for the issue of debt: there actually won't be much involved. She did have a bit left on her condo mortgage, which will carry over to the Bend home. But it's actually not that much, and the equity in the home we live in currently is more than enough to pay off the rest of the Bend house. So it actually is going to work pretty well.

Which makes me wonder if this kind of story is typical for Bend newcomers. Believe me, I know it all sounds pretty crazy, and it's hard enough for me as a quasi-traditional man to let her be the successful one in our relationship. But this is all part of the life lesson I have to learn...

From my point of view, she'll be just fine no matter what happens. But I am leaving my career to follow her to Bend. If we break up, I'm pretty much screwed.

And that's why I'm lurking around on the blogs of Bend residents. This is a major life decision for me.

I'd also like to say that I think Los Angeles/Hollywood/Las Vegas will be the target of some sort of terror attack before I retire. So it's just as well that I get the hell out of there and try to build a more sustainable, enjoyable life elsewhere. I want to be a writer, a novelist actually, and I'm hopeful I can realize this dream in Bend.

April 27, 2006  
Anonymous Anonymous said...

one thing i'll say is, the real estate market might go up and down... but both you and her are going to find a big difference in the 'market value' of an unmarried attractive educated woman w/ no kids in bend versus s.f. (hint: in bend there's maybe 50 women who fit that description)

i've been in bend since my dating years but lived in s.f. for a bit over a year (then married, moved back) and couldn't believe how many cute single women there and how easy it is to meet and date them... much different here! any attractive woman who's not married is usually a single mom or has 'been around' (which is a different deal in a small town where if you've been around long enough, everyone worth dating's been with everyone)

and unemployed guys 'finding themselves'... sorry to say but there is a lot of those here, but they're mostly harmless...

but if you can handle that you'll like it here... if you like drinking, lots of cool buddies to drink with...

April 27, 2006  
Anonymous Anonymous said...

I think I can handle it. I'm no slouch, and was one of the bigger fish in the small pond that was my college town. My plan isn't unemployment -- it's underemployment. An executive lifestyle with entry-level responsibilities. Being able to do so much more with less, that even Bend becomes an affordable place to live. Plus, a 9-5 schedule is so much more rewarding in terms of free time (something I have come to regard as most precious).

Who knows, we may not even be together in 2 years. Or I might freak out and have to break up with her rather than uproot my entire life. As such I really appreciate your point -- I better be aware of the incredible attractiveness she'll enjoy up there. In a way I already knew that, but I didn't consider the perspective of all the single men already there. I didn't know it was such a swordfight up there.

Seriously, though, do I really come across as some sort of bum? I was rather hoping my anonymous honesty would bear some sweeter fruit.

Hopefully they'll build that State University I heard the city was already preparing for. That would bring in TONS of luscious coeds or sure.

April 27, 2006  

Post a Comment

<< Home