So You Think You Want to Buy and Flip Homes?

Ancient and protected lava site on Big Island where mongooses freely roam.

If you think you want to buy and flip homes, consider this. Directly in front of my working-vacation cabana is an ancient lava site — the free lawn art of Big Island — where I am privileged to observe a  Rikki Tikki Tavi dashing about, scurrying across black rock, then resting to catch his breath, protected under clusters of sea grass before scampering to another spot. As a kid, I was enamored by Rudyard Kipling’s, The Jungle Book, foreign places and exotic animals and especially the story of the brave mongoose. The closest critter to a mongoose I’d ever seen at that time in Minnesota was a gopher.

You see invasive mongooses all over Hawaii now except for Kauai, introduced by sugar cane owners in the late 1800s as a means to control rats. The main problem with that premise is rats are active at night and mongoose are not. I wish the analogy were that simple to explain why so many people in Sacramento lose their shirts when they try to buy and flip homes, but maybe it is. Maybe they just don’t know what they are doing and don’t know that they don’t know what they are doing.

Every time I take a fixer listing in Sacramento, I am bombarded by calls from people who want to buy and flip. It’s like they woke up one morning and decided for no known reason that they have the a) experience, b) professional crews, c) real estate knowledge, and d) money to buy and flip, when they usually possess none of those things. They think how hard can it be? Buy, fix up and sell? Damn HGTV crap.

I was reminded of this today when I noticed a new listing on the market in Land Park, and my immediate thought was, hey, that home in Land Park is at least a hundred thousand if not two over market value. The location was all wrong for that price range, the home was too small and the upgrades were not very attractive, not really what buyers want, and the photographs were, let’s just say less than stellar. OK, they were embarrassing. My immediate thought was this was a home purchased as a buy and flip by an out-of-towner. The history and tax rolls confirmed my suspicions. Well, maybe they will snag an unsuspecting buyer from the Bay area. It happens.

I try to be non-judgmental when I receive calls on my pending listings, but the novices who want to buy and flip break my heart. They ask in earnest if I will call them if anything happens to the pending sale. I explain that we had multiple offers, bidding wars, the home did not sell at list price, it sold much higher. I know if I have to explain this part, the would-be guys who want to buy and flip are headed for trouble. Before I can offer empathy though, the callers often launch into an insult — a promise that I could “double end” the transaction and make twice the commissions plus I could later sell the home for them, as though that sort of scenario would motivate any Sacramento listing agent but the crooks. They don’t care if they do business with crooks, apparently, and maybe they’ll find one of those, too; it’s just not me, not how I do business.