From the
FAQ at
CondoFlip.com:By now, you may have seen some of the press that we have been getting about our Condo Flip™ website (http://www.condoflip.com). We've been written about in THE WALL STREET JOURNAL, USA TODAY, THE NEW YORK TIMES, FORTUNE and a host of other publications. We know that the word FLIP is not always used in a positive way. Well, we're going to re-brand the word FLIP to simply mean the "re-selling" of preconstruction condos.
After all, it's the word that buyers and sellers use most often. Don't forget that MONSTER is no longer a scary creature, it's a JOB HUNTING site. AMAZON is no longer a river, it's an ONLINE SUPERSTORE. YAHOO is no longer what you scream when you strike oil, it's a SEARCH ENGINE. So, FLIPPING is no longer the desperate attempt of a condo buyer to resell their unit, it's what a curious buyer does to see how much they can sell their condo for. It's as simple as that.
That is a major task to rebrand the word flipping. CondoFlip's website also claims that "Bubbles are for Bathtubs." We will see how long this internet based condo flipping company lasts. This gives a whole new meaning to dot condo.
From the FAQ at CondoFlip.com:
Posts
well i'm just shocked the level system relates to pricing at all. you would think that level 2 would be for a granitized condo, and level 3 would be for stainless steelisized, grantized, and plasmatized condo
ReplyDeleteYou've got that all wrong.
ReplyDeleteLevel 1: The condo is rented, but the rent is only half the payment due.
Level 2: The condo is not rented, and all the other units in the building are for sale also (See David's Bubble Bench Photos)
Level 3: The repo man is at the door and your NAR dues are delinquent...
Investors were using the term "flip" in the 80's. It is nothing new.
ReplyDeletebtw - new condo's were being flipped as were new houses. This phenom. is nothing new either.
VA,
ReplyDeleteSounds like you have experienced a similar market as the current one...How similar does today's housing market look to the one where prices dropped in the late 80's? Are you predicting a price drop in the northern va area? I don't think that housing dropped all that much, but I do remember seeing previous sales for less than purchase amounts on a cond I bought in 2000
I guess you were not around in the late 80's.
ReplyDelete"You know, in the old days the idea that someone could be persuaded to take out a HELOC, purchase a cndo in some so-called hot area, then flip it a year or so later for a huge profit would be called a "scam."
ReplyDelete5 years ago were not the old days, but they sure feel like it!
the above comment was meant for whitetower.
ReplyDeleteWas in High School and unaware of housing behavior.
ReplyDeleteGuys, this site is not for real. It has been around for over 2 years, and they have no real clients. For over a year its listing section only said "Coming Soon." Now they just have some descriptions and sales histories for pre-construction condos. Don't take this site too seriously.
ReplyDeleteThe site looks like it's intended as satire. At least I hope it is. As satire, and social commentary it's exceptionally well done, and just close enough to speculator pyschology that it seems ALMOST feasible.
ReplyDeleteteaparty
Speaking of satire...
ReplyDeleteDid everyone see that Tom Delay was quoting Stephen Colbert a few weeks ago? Delay's website was using actual quotes and clips from the Colbert Report in an attempt to make a point/defend Delay.
It took a deluge of messages to the Delay camp to get them to realize that Colbert is a satirist.
Narcissists often cannot recognize satire because they are too self-absorbed.
I have a proposal for all those who believe condos are priced fairly.
ReplyDeleteIn downtown Silver Spring, the typical condo I would like would run me 450-500K, or more.
I believe such condos are worth no more than 140K.
If you disagree, and think the price is fair, would you consider the following offer?
I give you 140K cash for such a condo. You hand over the title. The condo is now completely mine. However, when I sell it, I agree to
(a) let you sell it (as long as you make all payments while selling it- after I inform you of my intent to sell).
(b) let you pocket all the money you sell it for, less the first 160K to me (the extra 20K thrown in to cover any transaction costs and minimal inflation).
I wonder if any current condo bulls believe in the bull enough to take such a deal.
A Redskins fan
Waiting for Godot,
ReplyDeleteThe difference between now and the late 80's is that the Fed's aren't starting up the RTC to liquidate failed lending institutions that over extended themselves to speculative development.
RTC = Resolution Trust Corporation
Redskins Fan:
ReplyDeleteEach time you see a condo price, you retort with the same childish and useless line: I don't think those condos are worth more than 100k. So what? You've said repeatedly that you're not planning on buying a condo in the foreseeable future because you don't have the money. So who gives a flying fig what you think the price "really" should be since you can't afford to buy no matter what your fantasy price is? It's so damned tiresome to read the same exact word-for-word crap from you each and every time you talk about prices. You can't afford to buy; keep renting and simply enjoy life and get over the bitterness.
How about this scenario, Redskins Fan - you sit and wait for those apartments currently priced at 400-500k in Silver Spring to fall to your fantasy levels of $140k, then you pounce and buy them.
ReplyDeleteOf course, since it's pretty unlikely to see a drop of some 300-400k for those apartments, you won't have to hire any movers for the rest of your life.
Deal?
I looked at the website, then I re-read David's comments about the website.
ReplyDeleteWhew... if you cannot see that the website is a joke, you need to take a break.
David said:
"That is a major task to rebrand the word flipping. CondoFlip's website also claims that "Bubbles are for Bathtubs." We will see how long this internet based condo flipping company lasts. This gives a whole new meaning to dot condo."
"you sit and wait for those apartments currently priced at 400-500k in Silver Spring to fall to your fantasy levels of $140k, then you pounce and buy them."
ReplyDeleteThanks for the advice. This is what I am doing.
Tom, I am not in the condo market when Silver Spring condos are priced north of 450. I would be if they were priced south of 140.
If I am so out of touch with reality, why won't others jump at the chance to gain all that potential appreciation? In the offer I imagined, the condo seller would get all the price appreciation from this point onward. The buyer would get none (beyond enough to cover closing costs). And yet no one would be interested in such a deal?
If no sellers would be, why should I be interested?
A Redskins fan
In other words, in my hypothetical offer, the seller gets to reap all the great investment potential of a condo, while I get the condo at the price I think it's worth, and generously forego the potential price appreciation.
ReplyDeleteDo you think many sellers would be interested in that deal?
If not, why should I be interested as a buyer?
A Redskins fan
Redskins said:
ReplyDelete"If I am so out of touch with reality, why won't others jump at the chance to gain all that potential appreciation? In the offer I imagined, the condo seller would get all the price appreciation from this point onward. The buyer would get none (beyond enough to cover closing costs). And yet no one would be interested in such a deal?"
I think where you're out of touch with reality is: why should someone else be paying to lodge you till you decide to sell. Anybody taking you up on this offer would have to buy the condo for the $450K ... this would mean borrowing the money and paying $2500/mo to do so, or getting rid of an investment or the like and losing out on $2500/mo in income they are currently getting. So, you are out of touch with reality in that you are expecting someone to essentially pay your housing expenses for you while you do nothing more than give up your "right" to future appreciation ... Now, if you took that $140K and worked out a deal with a bank (or anyone for that matter) where you gave up that right for future appreciation AND paid them $2500/mo for the use of their money while you were using this property that they would have lent you money to buy ... then you would be back in touch with reality. But really, you out of touch with reality if you think you can buy a condo for what takes you less than a couple of years to earn ... It's never been that way in the past ... and it's not that way now. I mean, really, remember when people were paying $100K for a condo? Do you think they were earning $60K/yr or anywere near that? No, they might have been making $30K at best ... Somehow the concept of inflation (and the erosion of the value of money) is not one you have grasped. Sorry, I don't mean to be harsh, but I hate to see someone shoot themselves in the foot as you are doing based on really unrealistic expectations. And I especially get angry when I hear it from you 'cause with the exception of house prices, you seem to have a good head on your shoulders!
LOL. Thanks for the compliments, Lance.
ReplyDeleteI was more directing my question toward someone who already owned the condo, not someone who would have to borrow to buy it and then sell to me.
A Redskins fan
So Redskins fan, you basically want to be able to lock in about $1000 a month payments for the next 30 years and then nothing after that for a place that probably already rents for about $2000+ a month. That seems like a great investment for any owner. You should place an ad in the paper and craigslist. I'm sure your phone will be ringing off the hook.
ReplyDeleteI'm sure your landlord must love you, they never have to worry about you leaving.
I mean, really, remember when people were paying $100K for a condo?
ReplyDeleteUm, yeah, probably about 5 or 6 years ago. I bought my townhouse (3 bedrooms / 2.5 bath / brick front) for $130k in 1997 and I was making well over $60k then.
I've got some questions for the bulls who think that DC prices will never drop because it is becomming such a desirable place to live. This is addressed to the "we're different" crowd. Do you agree that there has been some speculative runups in many parts of the country (Florida, Las Vegas, San Diego, LA, etc.)?
Do you totally deny that some of the factors that were at play in those areas has also affected our area? I will not argue with you when you say DC has become a better place to live. With that surely comes some price appreciation. I doubt any would argue that point. But what part of that 200% appreciation over the last few years is due to the speculative fever that you see everywhere else and what part is due to increased attractiveness and affluence in the area? Surely you are not attempting to say that the entire runup was due to the former and it's just coincidence that there has been price runups in less attractive areas, are you?
redskins fan said:
ReplyDelete"I was more directing my question toward someone who already owned the condo, not someone who would have to borrow to buy it and then sell to me."
But, he'd have to either (1) give up his rents from the condo or (if he was living in it free and clear) (2) have to start paying to rent/buy some other place ... See where I'm going with this? ... i.e., either way, the person is having to pay you to stay in there ...
to lance and anon 2:17--
ReplyDeleteI dont believe that 450K condos so not rent for $2000 in Silver Spring. Similar apartments rent for a lot less than that.
You are focusing on some potential defects in my example, but getting away from the main point. If I concede there are some defects in my example, let me explain what I am trying to get at. If these condos are such great deals at these high prices, will sellers be willing to come up with some kind of contract that protects the buyer from downside risk in exchange for granting the seller all the upside benefit?
In other words, I would be perfectly willing to forego all potential capital gains on a property at these prices in exchange for having a contract that also gives the risk of future capital losses to the seller. Since the sellers are saying that these condos are a great deal at these prices, wouldn't they be interested in helping me design such a contract?
A Redskins fan
Just keep renting Redskins fan, you basically want to be a renter, because this is essentially what the contract you are asking for is. If you are unwilling to take the risks involved in home ownership of the asset changing value you may as well rent. Your best bet is to move into DC so you get the rent protection laws and can live in the place until you want to or need to move. You obviously have no desire to be a homeowner and it's probably not worth the stress for you.
ReplyDeleteAt 450k for a condo in SS, you are looking at a very nice property that probably wouldn't be suitable for the rental market (i.e. building restrictions, hard to find that type of tenant). I was using a comparison of what a TH or SFH in that area would go for to get the $2k rent.
Redskins asks:
ReplyDelete"will sellers be willing to come up with some kind of contract that protects the buyer from downside risk in exchange for granting the seller all the upside benefit?"
Redskins ... it's called "a lease" .... and you've already got that deal! LOL
Well, I'm happy with this deal, so on to more renting.
ReplyDeleteA Redskins fan
Condoflip is a very sophisticated site. All of the links work and the design is professional. I don't think it's satire.
ReplyDeleteI actually own the domain CONDODITCH.COM - a satire unto CONDOFLIP.COM. It is by the way, for sale if anyone is interested. Email me at majk1963@hotmail.com if interested.
ReplyDelete