I Thought Flippers Were Out of Business!

I was talking today with a woman referred by a past client.  She and her husband were in the middle of a 100% cash-out refinance on their home.  They have a small handyman business and need a “stated income” loan because their tax returns don’t show adequate income.  She was upset because her lender had quoted her 12% on her 2nd loan. 

After telling her she should feel lucky to get any kind of 100% stated income financing right now, I asked why it was so important to pull all of their equity out.  She replied that they had just paid $12,000 to go through an on-line school to learn how to flip properties, and they needed the money to get started.  In fact, she said, they were just dying to get started. 

“Gee,” I said, “are you sure you want to try that in this (Sacramento) market at this time?”  “Oh yes,” she said, “we know all the tricks now.”

Until that moment, I really thought that consumers had finally awakened to the truth about flipping, that for most it only works in Seminarland, to borrow a term from John T. Reed.  I was shocked and disgusted by the amount of money this couple had spent to gamble their remaining home equity in a market that will very likely hand them their heads.  As the finger pointing continues, let’s not forget to acknowledge the crooks who continue to preach the gospel of greed as they sell the consumer down the river. 

Got a Comment?  Share it below

Got a Question?  Send me an email.

Share This