What happens if a house flipper accidentally buys a bad property? ?
Does the person walk away and ruin their credit? Sell to an inexperienced buyer? Or what?
- SlumlordLv 72 months agoFavorite Answer
They probably just do the deal and make less money on it. If they bungled the numbers so badly that they lose money on it then maybe they are in the wrong business. This does happen, even with experienced flippers but actually losing money is maybe 1 in 100 for an experienced flipper (but making less than expected is common, at least it is for me).
- babyboomer1001Lv 72 months ago
You'd be a jerk to abandon a house you own. The county would be after you down the road, for property taxes that you owe. That's just for starters. The city would be after you later, for various reasons. Your purpose was to flip it so FLIP IT! If you have to sell it cheap and lose money to sell it, so be it. You are in a risky business and the more inexperience you have, the less money you will make flipping. Sometimes, you win; sometimes, you lose.Source(s): Certified Paralegal, with 25+ years' experience.
- Christin KLv 72 months ago
This is the risk any homebuyer, flipper or not, takes when purchasing a house. You never know what you might encounter inside the walls. Most experienced flippers have contingency funds for just such emergency problems. A professional house-flipper will NEVER walk away from a purchase. It's not good business. Nor will they try to defraud or fool a buyer. They will fix up the house and sell--maybe at a loss--but they will sell it.
- No MercyLv 72 months ago
they used to show that american show called "houseflippers". i remember there was one girl who decided to buy an old ruine in california together with her boyfriend. during the long process of renovation they got stood up by 2 different construction companies - they took deposit and just didnt show up for a long time. then she fell out with the bf and he left for abroad, so the girl was left alone to fend bad contractors. all in all it took her more than a year to finish renovations and she had invested to much money in it by that time so the price of the house became unrealistic. thus she had to live in it because selling it was no longer an option - nobody would offer the price she could even break even. so this is how bad flipping ends obviously
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- Anonymous2 months ago
There is no one set answer to this. Not every house flipper has the same circumstances.
Having substantial assets and multiple investments mitigates the risk of one egg in the basket going bad.
Someone of limited means who invests all their eggs in one transaction is at higher risk of financial disaster if things go south.
By the way, a lot of buyers are fully aware of amateur house flippers. It takes less than five minutes to find out who owns a home, how long they've owned it, how much they paid for it and what permits have been acquired since purchasing it.
- USAFisnumber1Lv 72 months ago
If a house flipper takes a loss he still has to pay up. If he walks away and makes the lender take the loss he will never get a loan again and his flipping days are over.
- ?Lv 72 months ago
Usually you just have to take the loss.
- JudithLv 72 months ago
They take a loss and either pay the bank or suffer bad credit. And maybe they should consider another line of work; apparently they didn't do their homework. Even I know that anything can go wrong - and usually does. A flipper should prepare for that eventuality.
- Robert B.Lv 62 months ago
All of the above plus take a loss on it.