Today on the radio I heard a commercial for a company promising to teach me the exciting art of flipping houses. I could buy and resell houses up to three at a time in less than 30 days.
I guess I thought it would take a bit longer for this nuttiness to come back. I do know some smart people who are buying undervalued houses, putting a bit of money in them, and putting them on the rental market. Converting owner-occupied homes at the bottom of the market to rental properties makes sense to me, particularly since the ones I know are doing it with all equity.
However, I presume the folks tuning into the radio don't have that much equity, and anyway they were explicitly using the word "flipping" in the commercial rather than talking about rental income. I wonder who is lending on this stuff? I tried to refi my mortgage about 6 months ago on a 40% LTV but as a self-employed person it was a pain in the ass. Who's financing house flipping?
(yeah, I know, the answer probably is "all of us, via Fannie and Freddi or some other dumb government program).