Friday, August 26, 2005

Meeting a Flipper

Last night, I was at a mid priced restaurant in the Chicago suburbs when my mom introduced me to a friend of hers. She told him about my interest in the housing bubble, and told me about his condo in the Miami area. This friend owns a successful retail store in Chicago and is also a flipper. He said that he already made one successful flip on a property. Now, he is holding another condo in a suburb of Miami and has owned it for less then a year. Part of the conversation went something like this:

Flipper "So you think that prices will decline? By how much in Miami?"

Me: "Prices will decline in Miami. By probably 20 - 30% inflation adjusted."

Flipper: "When will the start declines?"

Me: "Probably, starting the fall and continuing for a couple of years. You should consider selling now. "

Flipper: "I need to hold it until next year because of the capital gains tax issue."

Me: "Ok. They are building 60,000 condo units in Miami. Thats huge"

Flipper: "What about all the 1000 people a day who are moving to southern Florida?"

Me: "Sure. But will they be able to afford an expensive condo? Are you losing money each month on your property?"

Flipper: "Ya, I am losing a few hundred dollars a month."

Me: "If you hold you will be burned."

Flipper: "Good bye" and walks away.

12 comments:

  1. You're just jealous. You probably rent or live in your mom's basement.

    ReplyDelete
  2. seymour,

    I do indeed rent. I could buy an overpriced condo in the DC area, but refuse to.

    ReplyDelete
  3. Ever since we roomed together in college, I've been trying to get you to be nicer to people :-) See what happens ? :-)

    (Thanks again for the b-day gift)

    ReplyDelete
  4. David and Josh are you guys lovers?

    ReplyDelete
  5. I guess the flipper flipped you in the end.

    ReplyDelete
  6. Shame on you. ;)

    Was your mom pissed? Mine would have given me an earful.

    ReplyDelete
  7. I'm so grateful you were at "mid priced restaurant in the Chicago suburbs."

    If you were in a High Priced Downtown Restaurant, you night have burst the bubble!!!

    ReplyDelete
  8. I'm so grateful you were at "mid priced restaurant in the Chicago suburbs."

    If you were in a High Priced Downtown Restaurant, you might have burst the bubble!!!

    ReplyDelete
  9. Flippers lead tough lives at least that is what I am reading in "Life of a Flipper" by Dr. Hugh Jorgan.

    ReplyDelete
  10. Capital gain tax? Soon it will be a non-concern when people start asking about deducting losses.

    ReplyDelete