Flipped right in half

I'm torn over flipping real estate. The entrepreneur in me doesn't fault anyone from making a buck on a service or product for which there is demand. But the ethical side of me finds fault in the facts that:

• flipping artificially inflates property values because it temporarily removes units from the market reducing supply
  
• flipped units are rarely subject to permits and inspections because most flippers are slapping paint, snap-flooring and tile over eyesores, not changing structure
• flipped units come with no guarantees
• flipping most often happens in tight sellers markets where subject to inspections can often be turned down because of hyper-demand and stupid buyers

Whenever we look through MLS we see empty units. Some are obviously the work of flippers, some are honest updates done by the previous owners. How can we tell the difference? Owners are less likely to do the work after they've bought and moved and more likely to do the work while they still live there. When we walk through a unit that is empty, has a new "kitchen, bath and flooring" including the aforementioned snap-lock flooring, stainless appliances, granite-look counter tops and $10 pot lighting, we can smell the flip.

What is a bear to do? Don't buy the flip job. Ever. The deal is in the sweat equity. Flippers, unless they happen to be contractors, rarely have access to the supply discounts. So this means they get their mark-up from doing the work on the cheap, doing it themselves, and selling for maximum profit.

You can beat them at their own game by not buying a flipped unit. If you must buy now, try and buy a good deal. Flipped units are never good deals. Buy the unit that needs cosmetic work. Do the work yourself. Take a vacation when you take occupancy and put a week into cleaning, painting, replacing worn flooring, getting new appliances and redoing kitchens and bathrooms. If the work you are doing is not structural, you can do it a lot faster than you think. Leave the finishing for last. But don't finish last by buying a flip-job.

If people stop buying the flips just because they look nice and start paying attention to the underlying economics involved, then the flipped units will sit, prices will come down and the 20-30% (our guesstimate) of properties that are currently sitting vacant will give the bump to the listings necessary to keep the downward momentum moving.

For what it's worth: we were in the US yesterday. Save yourself the time, don't bother looking there for good deals. All the numbers we were seeing in the malls were within $5-$10 of the ones we see up here. Even on the big ticket stuff. Real estate, that's another story. Anyone know if you can live in Blaine, Washington and work in Canada year round? If you can you can live for 50 cents on the dollar compared to White Rock.