Las Vegas Sun

August 29, 2014

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Letter to the editor:

Flipping homes aids neighborhood

A recent TV ad disparages Shelley Berkley for “flipping” foreclosed homes for personal profit. So what? Flipped homes are improved and resold to buyers who will live in the home. Much better than a weed-infested, green-water mosquito haven that drops everybody else’s property values in the neighborhood.

Flipping homes is not a “dirty word.” There are several properties in my neighborhood that need to be flipped. It’s a win-win for everyone.

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  1. It can also helps to raise property values.

    It is a mixed blessing and sorrow.

    My concern is for those who lost their homes to foreclosure. Their dreams collapsed with the market. I worry for their recovery. Where are they now?

  2. Mr. Lind:

    Did you miss the housing bubble of 2006 and still? And, more importantly the reasons for it. Tell me sir, did flipping cause the bubble or the other way around.

    CarmineD

  3. Flipping homes is legal and Berkley has a right to do it just like anyone else. Berkley's problem is that she'd been in Congress long enough to 'know' she should have declared a conflict and stepped aside for the legislation that benefited her husband's business....and she didn't.

    Due to that alone, she cannot earn my vote. The reason we are where we are as a country is that we have too many people like Berkley in Congress, on both sides, They put their ambition and financial well being above doing what is right for the people that they represent... and then we compound it by returning them to office.

    If we want better performance by Congress, we cannot ignore this kind of behavior.

    Michael

  4. Flipping a home involves, first, BUYING THE HOME. Usually the flipper uses his/her own money. Subcontractors are hired for the work, creating jobs and helping the economy. Ms Berkley is not running around "picking out color schemes, flooring and appliances". Her hired staff/subcontractors do that. The idea is to come in at or under budget for the renovation, place the house on the market and hope that it sells at a profit. Home values will increase in all neighborhoods that are rid of abandoned, bank owned eyesores. If the house doesn't sell at profit, the flipper loses, but the improved house is still there. There is no downside to flipping homes, except to the venture capital invested by the flipper, if the house doesn't sell.

    Michael: You seem to be linking flipping homes with the "conflict" of keeping kidney dialysis available here in Nevada. Two different subjects.

    Carmine: Without a housing crisis, resulting in the foreclosure issue, there would be nobody flipping foreclosed properties. Suspect bank mortgages, people buying more house than they could afford, and those same people using the home as an ATM caused the problem, not flippers. I actually OWN my home, and owned it far earlier than 2006.

  5. "She was probably coached by Harry Reid who is a master at using his office to flip a land deal"

    Now now Future, dirty harry told us how he made his millions when he debated Sharron Angle: "Hard work and smart investments." Yeah, right. One of the biggest belly laughs I've ever had and I am old in the tooth.

    Future you should really think about becoming a trusted poster here.

    CarmineD

  6. Big difference between Berkley and Heller on this issue.

    Berkley is trying to do things to get us out of this economic mess that Nevada, as well as the entire nation, is mired in. Berkley is trying to single handedly solve the home/business foreclosure problem here in the best way that will benefit the people of Nevada. I admire her for taking a stance and ACTUALLY DOING SOMETHING.

    Heller is trying to do things only according to the Tea/Republican Party heavy handed politics. He doesn't like it when the people are taken care of. He only is concerned when the rich benefit. He wants this all to bottom out. People out on the streets digging through trash to survive. He only wants the banks and the rich to benefit. That's why it's advantageous for him to....DO NOTHING. He fully supports Romney's vision that everything should bottom out. And, in the process, hurt as many people as he can.

    Big difference, people. One is doing something (Berkley). The other finds it politically beneficial to do nothing (Heller).

    We been to Hell. We don't need to go Heller.

    Berkley 2012!

  7. "Carmine: Without a housing crisis, resulting in the foreclosure issue, there would be nobody flipping foreclosed properties."

    I'm very familiar. My nephew had a mortgage banking business with two other partners, friends of his. He learned well from my family business in which he was the heir apparent but declined for bigger and better things. They made millions. Had over 100 employees nationwide. And he lost it all. Everything gone. Good kid. Smart. No education except a HS diploma. He's finishing his college degree now at 45 and working for Chase. He talks about going back into the old family business which I sold in 1992 to a willing buyer when my nephew was on the road to riches and didn't want it.

    CarmineD

  8. "Berkley 2012!"

    Start planning for 2016. Berkley's gonna lose.

    CarmineD

  9. I don't know of too many people who have been able to buy foreclosed or distressed properties. Ms. Berkley's office allows her to get deals not available to the regular Joe. This is how a congressperson can become wealthy while in office.
    She is probably taking care of the bank while in Congress.

  10. For CarmineD: to your, "One of the biggest belly laughs I've ever had and I am old in the tooth."

    Haven't heard the reference in a while, but I believe it is "long in the tooth" as farm animals teeth appear to grow longer as they age. Ranching and farming have been my long time professions, so this one caught my eye.

    On the subject of flipping homes, the person doing the "flipping" is taking the risk. Improving these subject homes helps the neighbors and neighborhood communities. If anyone, including Shelley Berkley and her family, are involved with flipping houses, they do so at their own risk, and they are helping out impacted American neighborhoods. No harm, no foul.

    Blessings and Peace,
    Star

  11. Flipping homes is legal. Flipping homes helps the tax base. Flipping homes creates jobs. Flipping homes helps raise property values.

    All true, and all come with serious consequences when accelerated ahead of market conditions. In the case of investing (that's what it is when flipping homes) in the Las Vegas housing market, we are considered like using a tissue--wipe your nose and throw us away.

    Flipping house takes away from the traditional buyer the gradual steps of home ownership. Such as, a family or individual buys a home for $80,000. Three years later the sales the home for $100,000 and buys a larger home for $110,000. When a housing market has accelerated, such as in flipping homes, the second step of purchase would be much higher. Taking the buyer's income out of normal purchase.

    Currently that are millions of dollars being invested buying foreclosed homes in Las Vegas. The huge majority of sales are cash buys. Many homes being purchased remain empty. The current gains in the Las Vegas housing market are because of the cash buys from investors, not because individuals or families working and living here in Las Vegas. The marketing is being artificially inflated, again. This time with real money, not leveraged by fraudulent or straw buyers.

    An invest can received a better return on investment by purchasing a foreclosed property. Let's say an investor buys a property for $100,000. The investor rents the property out for 5-years for $1,250 per month. At the end of five years the investor sales the property for $140,000. The investor would have gross income from the property of $115,000, plus receive the original investment, minus maintenance cost and improvements, which many can be a write-off.

    Here's the bad part. people that flip houses are not 5-year investors. They are looking for quick buck no matter the consequences to the market. As long as the market continues to pay, the investors will continue to flip. Here's the problem with flipping houses in the Las Vegas market. Wages and income in Las Vegas, for the Las Vegas worker, will never keep pace with the flipping. Investor are not going to start buying from investors in a flipping market (had to say it, that funny).

    Bottom line for Las Vegas, our housing market for the people who live here is not designed for flipping homes. The sad part is, people like Shelley Berkley who want to go to Washington saying they will help the working middle class are doing questionable things like making money off the backs of working people by flipping homes in a market that cannot sustain home flipping.

    We have already seen this movie up front and personal here in Las Vegas.

  12. I will not vote for her but have no problem with she and her husband buying and selling homes for financial gain. As long as this activity is open to others as well,and it's a level playing field this should present no problem.

  13. "Haven't heard the reference in a while, but I believe it is "long in the tooth" as farm animals teeth appear to grow longer as they age."

    I'm not a farm animal so I revised for my own use. Although I have been likened in appearance to some.

    CarmineD

  14. So it's ok for Democrats to profit. But there must be something wrong with successful Republicans who pay all their taxes.

  15. Gary,

    As I stated, I have no problem with Berkley or anyone else flipping homes. I say good for her. What I also said still stands. I did not confuse the two.

    Michael

  16. Gary Lind,
    Jealousy runs deep when one is not the house flipper.People who complain either can't afford to flip houses.Or are following the Republican doctrine,which trys to make something out of nothing in trying to discredit Ms. Berkley.

    Very good editorial and no-nonsense discription of what we should be doing more off, with vacant and foreclosed homes.

  17. The number of foreclosed homes for sale has shrunk dramatically. One could argue others who wanted to buy a home at a steep discount were outbid by Ms. Berkley and had to pay much more, a disadvantage to the poor new home buyers she "helped" thru her flipping business. There are plenty of other investors out there doing the same thing, which is keeping the market tight and prices up. Of course the banks are holding back property as well, partly due to the robo signing laws. My personal view is Ms. Berkley should have not gone into the flipping business at the same time she is in an elected position in Washington. If she had bought homes, fixed them and sold them at no profit helping families then she would have served her constituents in a much better way.

  18. RHG58. Flipping homes HAD NOTHING TO DO WITH THE REAL ESTATE CRASH HERE. If anything, the crash CREATED the situation that made flipping possible. Example: two homes across the street from me were foreclosed, vacated, flipped and SOLD TO NEW BUYERS. Instead of decrepit, uninhabited blights on the neighborhood, they are occupied by new owners WHO PAY PROPERTY TAXES and otherwise contribute to the community at large. Also, the plummet in home values was going to happen sooner or later. Property values have receded to a more realistic level, allowing more people to join the numbers of homeowners here in the valley. A winning situation for the new homeowner and the viability of the economy here.

  19. You are assuming she put money into the homes...

    Flippers often flip without spending a penny on the home. Buy. Hold "x" period of time. Then flip.

    Did she?

  20. Joan, Why does it matter?

  21. I would be more concerned about the state of all those homes that went to foreign buyers, which were significant.

    Are they being renovated? Are they being resold, to who, and after how long?

    For all those who have so much interest in on Las Vegas resident flipping homes, maybe you would like to do the research that would answer my questions on foreign purchases.

    I doubt it is worth your time, just like your complaints.

  22. Michael,

    You introduced Berkley's saving the UMC Transplant Program, the only one in NV, for people with End Stage Renal Disease.

    Aside from that, I guess you are for increasing the cost of the federal ESRD program of the Federal government, as costs in California are more expensive than they would be in Nevada, based on the market basket. Seems a bit inconsistent, or maybe just not understanding how the payments vary depending on locations.

    Add to that transportation from NV to CA by air ambulance, and ground ambulance.

    It could also result in a longer stay with higher costs, as well as the lack of continuity of care between surgeons in CA and Nephrologists here.

    There are all kinds of things that can result in high cost for transplant patients.

    It is really a good thing that Shelley Berkley fought to keep the transplant program going here in NV, both for patients and for cost control of the services in a federal healthcare program.

    The money her husband will earn is no comparison to the additional costs of patients having to go to California for transplants.

    I would also like to add there is another benefit to NV to have this program here. It has to do with UNLV Medical School training and residencies.

    Considering that a number of graduates for UNLV medical school and residencies become our physicians, I , for one, want the best trained possible.

    Shipping patients out of state does not serve the population of NV.

    Anyone who understands all the aspects involved, also understands that what Shelley Berkley did for NV was a huge benefit for all, even if her husband benefits to a degree much smaller than the overall benefit.

    Plus, the contract for services provided by the multi-physician group, is not for Dr. Lehrner alone, and is a contract with a duration. There is no guarantee the group he participates in will have the contract renewed. It is a competitive world in medicine.

    The reason the group got the contract is because UMC wanted a local group to manage the program rather than the out of state group. That is very understandable and increases quality care.

    From a healthcare standpoint, I think it is a real shame that this has become such an issue, and partisan campaign battle cry.

    The citizens of NV are done a disservice, as well as the taxpayers.

    I do agree that this could have been avoided by Shelley Berkley by not assuming others in Congress had brains enough to know her relationship, and strictly following the ethics rules. I guess brains only apply to campaigns for all members of Congress.

    I also hope that the voter's will have enough brains to realize that what she did was far less a problem that the very positive work she has done for NV citizen's, particularly So. NV. She is an asset to us and a loss to Heller would be a tragedy for citizen's in So. NV.

  23. There is no point crying about flipping houses after banks have already foreclosed on the people who lost the battle. It is a legal process. The flippers didn't cause the owners to be foreclosed on.

    I don't see this part a question of conservative vs. liberal. It has gone past that point. There are both conservatives and liberals in business.

    From a liberal viewpoint, there could be groups who buy, renovate and sell to others at a reasonable profit enabling more purchases and a repeat process, benefiting more who need a break. They could also provide loans eventually.

    Hey! Similar to Habitat for Humanity. Maybe a good worker co-operative business, in one or more phases of the process. It multiplies and expands.

  24. Both Democrats and Republicans are in business and pay their taxes.

    The problem isn't so much with small businesses, it is the big one's that really have caused everyone else to be depleted, by the entitlements & redistribution of wealth that only they have for their benefit.

    They keep accumulating wealth and sitting on it, as well as power to help them keep accumulating, while everyone else loses the same. It is the power to do whatever you want regardless of how it effects the country that is the problem.

    In the food chain of the bigger they are the more wealth and power they have. Each of us finds ourselves somewhere along the chain, higher or lower.

    Who do you work for? The corporate suppliers, the banks, healthcare, etc? The boss? Don't think that because you are self employed or own a small business that you are totally free of having a part of your labor going to make a profit for someone else.

    Most of us contribute to the city, county, state, or country through our taxes. That is the system that was set up. As the country developed, became more populated and complex, the needs changed, and the taxes we pay.

    Who really benefits from the taxes, besides those who need Social Security, or Disability to survive? Those who for a limited time need assistance through difficult times?

    Students benefit, who have no ability to get loans from parents for their education. Even those who could get such loans but don't because the parents won't.

    Let's not forget those who protect and serve us as teachers, law enforcement, fire and safety personnel.

    Taxes pay for schools, colleges, universities, equipment and machinery, libraries, public hospitals, parks and recreation facilities.

    Also, we travel on highways, roads, bridges, and need infrastructure to protect us from flash floods. Our taxes pay for emergency services, ambulances, EMT's who can save our lives when needed.

    Who else? The answer is big and small businesses benefit through government contracts for any number of products and services. The most obvious is any business connected to the military industrial complex in supplying whatever is needed by the military for war and other purposes.

    However, big corporations have decimated our economy and make everyone else, small business included, experience the result of a rigged system. They don't really give a darn about anything but profits and power, and know very well how to keep it to themselves, nor should they because that is capitalism.

    To not recognize that is like smiling at the person who hands you a cup of tea with poison in it. Knowing or not has the same effect...death.

    Of course, if you are the one handing the cup of poison tea to someone who will drink it, you may think it is a benevolent act. I am not sure about the one who drinks it.

    Both parties protect the tea servers and pit the rest of us against each other while laughing all the way to the bank of money and power.

  25. The article pertains to house flipping in Las Vegas, referencing Shelley Berkley as an example of someone flipping houses in Las Vegas.

    Yes, flipping houses in Las Vegas is a dirty word. Yes, flipping houses in Las Vegas contribute to the housing bubble, the feeding frenzy. Yes, flipping houses in Las Vegas did not help the middle class in Las Vegas. Yes, flipping houses in Las Vegas cannot and did not keep pace with wages and incomes for potential middle class home buyers.

    Flipping and investing are different when it comes to single family homes. One cause major problems in the long term. The other helps build home equity, helps develops stable neighborhoods, and allow the pace of income and wage to support home prices.

    Yes, flipping houses in Las Vegas is a dirty word. We need responsible home owners, not overnight drive-by turning a quick buck at the expense of the working families and individuals who need housing, inline with income and wages.

    I remember driving through several new developments during the crazy time in 2004 and 2005. The majority of the new home were sold and had different realitor for sales sign posted up and down the street. New houses, sold and empty, and on the market with higher prices than the new that were not sold by the builder. I remember going into sales office and hearing a lady buying three houses.

    Yes, flipping is a bad word on Las Vegas.

    Now, let's see if the new investors are any different. And you now what, it wouldn't be a surprise if the new investors are the old investors. Now, they can come back and buy at a lower price.

  26. Longtimevega,

    Some of the speculators who ran up property values to unreasonable values, got caught in the bursting bubble trap and lost money.

    The game of speculation is a dirty one, but there are some people who are motivated now in doing some good in flipping homes, especially if locals.

  27. For CarmineD: My heavens! I hope you did not take my comment personally or in a negative way! It was my feeble attempt of clarification and origin of the expression of being, "Long in the tooth." Even today, in the rurals, folks still talk this way about each other, and if it is about one of their critters, a critter. In my book, if someone is a half century old or more, they just may be getting "long in the tooth".

    Our teeth might be a getting long, but our minds are better than ever, only improving with time and exercise (using them)!

    Special Blessings and Peace,
    Star

  28. "For CarmineD: My heavens! I hope you did not take my comment personally or in a negative way! "

    No, never. Not at all. I enjoyed it. And do all your commentary. Thanks.

    CarmineD