City of Austin vs. "Predatory" Flippers/Wholesalers

[David Ivy]

The City of Austin recently passed a resolution to "educate homeowners who could get taken advantage of by low offers, with the promise of quick turnarounds."

According to this story from KXAN, "The resolution will provide resources for homeowners, many elderly and low-income families, who the city says investors prey upon to sell their homes, "through high pressure, deceptive, and/or exploitative tactics." The same people who may be struggling to stay in their homes to begin with."

The resolution calls on the city manager to launch an educational campaign including:

• Best practices regarding educational and marketing campaign strategies
• Outreach activities in areas where populations at risk are being targeted
• Potentially include a hotline to refer homeowners to a “Real Estate Agent List” and a list of legal resources
• A campaign work plan that includes a timeline for implementation and identification of both public and private funding options and potential partnerships

[Jerel Ehlert]

Email I sent to the reporter:

"Ms. McGivern,

Regarding your story of April 26, 2018, you only showed one side of the story and completely ignored the other.Where does city council speak with these heinous "flippers"?There are already statutes and regulations regarding fraud and deception in real estate transactions.Educating people who want to be educated is fine, but if a governing body restricts the pool of ready and willing buyers, more properties will go to foreclosure and sit on the market longer.

Real estate investors perform a vital function in every jurisdiction: putting properties back on the market, in good condition.Many of the properties they buy could never pass conventional lender's inspection because they typically require tens of thousands of dollars in repairs that most homeowners do not have or cannot do themselves.Additionally, many real estate investors near metropolitan centers can access almost an unlimited pool of funding to buy and remodel properties if the numbers work.From contract to close, the time can be in as little as 3-4 business days.The delay is mostly waiting on title companies.So when flippers mail letters and post cards to owners saying they can "close quick" and "all cash", that is a fact, not fraud.

Of course, realtors will recommend you list your property – that's how they make money – so they are self-interested, which makes the report biased.Maybe next time you can have a "flipper" on you show for balanced reporting.

The idea of anyone feeling "pressured" by getting a post card or flyer is ludicrous.If the homeowner doesn't want to sell, the solution is to throw them away.But the idea of "there ought to be a law" is equally ludicrous.If there are bad actors committing fraud, the answer is to enforce the laws already on the books.

Out of all the properties posted for sale every 1st Tuesday of the month at the trustee's sale, a very large percentage never make it because they are bought by the very flippers you disparaged.If not for the real estate investing community, cities around the country would look much, much worse.My biggest complaint with your report is that you completely failed to get the rest of the story.Your editor needs address this."