WSJ: House Flipping Makes a Comeback

[Newsjock]

Source: Wall Street Journal

Four years after the collapse of the U.S. housing bubble, flipping homes is back in fashion.

... Now, a different breed of flipper is proliferating: one who seeks bargains at foreclosure auctions. Unlike the boom-time flippers, the latest generation needs cold cash, lots of local-market knowledge and strong nerves.

Investors compete mostly with other full-time professionals who monitor foreclosure auctions at county courthouses across the country. The bidders often haven't had a chance to inspect the property or determine whether it's occupied by tenants, who may be hard to evict.

... Sean O'Toole, chief executive officer of ForeclosureRadar.com, a research firm, estimates that in November about 21% of homes sold in trustee sales in California went to investors rather than to a foreclosing lender, up from 6% a year earlier. The trend is similar in some other areas with high foreclosure rates, including Phoenix and Miami.

Read more: http://online.wsj.com/article/SB126022588878780861.html?ru=yahoo&mod=yahoo_hs

[frazzled]

1. It would be easy to stop this practice

The state and federal governments would simply have to impose big tax liabilities on selling a home (maybe make that an unoccupied home?) in less than one year after purchasing it. Details would have to be worked out to avoid affecting people who legitimately need to sell their home shortly after buying it because of job transfer, divorce, death, etc.

[me b zola]

2. In related news:

HGTV had a show on last night that featured a home owner who bought the house from what I assume was a flipper, gorgeously remodeled but had huge problems. They ended up having to gut the entire house and put in all new plumbing + much more.

Ugh.