Is house flipping dead?

[Matt Shields]

I ask if flipping is dead, or at least dying? Here in the Phoenix, Arizona metro area, I have watched the margin on deals become slimmer and slimmer. During the past few years, television shows and seminars have flooded the flipping market with people who believe flipping homes is an easy way to riches. Trustee auction prices are near to what MLS prices are, and I cannot believe what people are paying, they are behind the eight ball from day one. Now the large corporate flippers like Offer Pad and Open Door have moved in sucking up deals, and Zillow (the 800-pound gorilla of the real estate world) just announced they are getting into the flipping business here. Phoenix seems to be the testbed for these companies before they expand to the rest of the country, so if you don't have them operating in your city you probably will soon. What are your thoughts?

[Darren Lenick]

@Matt Shields in the long run I’m not overly concerned as this corporate entities have huge overheads and as margins get smaller and smaller they will have a tough time sustaining themselves. Small operators who work from home or small “mom and pop” offices will do better as they will be able to live from previous profits as long as they don’t squander the proceeds. If we have even a minor correction in the market, the large corporations could be left sitting on a lot of negative value inventory that will need to be liquidated In order to cover overhead and can only benefit the smaller entities with cash to scoop them up. My 2 cents for what it’s worth.