As every real estate wannabe knows, “flipping” home is supposed to be one of the tried and true techniques of the business. This report from Reuters blames “investors” and “scammers” for the demise of a once nice neighborhood.
“Flipping” though is traditionally though just taking a property bought at discount, sprucing it up and selling at a profit in a fairly short time window. Buy low… sell at a profit. It’s economics 101.
In this case though it wasn’t buy low sell high, it was buy without documentation, stay without paying or just squeeking by until they caught up with us, and then head for the hills. It was the lending rules that let anybody borrow anything without any documentation that let - as the article said - “Charles Manson” types move into neighborhoods they otherwise couldn’t afford. It was “easy money”.
That’s the economic law “Bad money drives out good money.” Thank the bankers not the ordinary investors.
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