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.

13 comments:

  1. DONT WARN ANYMORE IDIOTS! LET THEM EXPERIENCE A DOWNTURN! I GAVE UP WARNING FAMILY/FRIENDS A FEW MONTHS BACK.

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  2. Seymour WainwrightAugust 26, 2005 11:49 AM

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

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  3. seymour,

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

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  4. 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)

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  5. David and Josh are you guys lovers?

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  6. I guess the flipper flipped you in the end.

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  7. Shame on you. ;)

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

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  8. Seymour WainwrightAugust 26, 2005 3:40 PM

    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!!!

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  9. 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!!!

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

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

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