Will the last flipper please close the door on the way out of the building
Back in May, I wrote about a home apparently bought by a flipper but destined to flop in Mount Pleasant. Click here for the original story.
Purchased for $650,000 and put on the market with no indicated improvements at $699,900 which was 7.7% higher than the purchase price, I said there was no way this property could be a profitable transaction.
It wasn't. Here are the bloody details. After two price reductions of $10,000 each and an increase in the buyer agent commission to 4%, the property went under contract and I noticed where it recently closed.
The final selling price. $640,000. Are you surprised? 
More bad news. Deduct the 4% buy side commission of $25,600, let's be really generous and suggest the listing agent took only 1% or another $6400 because he/she was the buyer agent for the original transaction and the $640,000 sale price is now down to $608,000 to the seller. Closing costs including deed preparation for $200 and transfer taxes of $3.70 per thousand equaling $2368 takes it down to approximately $605,500 and since the owners had to carry the house for approximately 5 months and pay for insurance, taxes, electricity, the lowest possible carrying costs I can imagine would be another $1100 per month to round down to a tidy $600,000 net or a loss of $50,000 in a rather short period of time.
What were they thinking?
The Charleston South Carolina real estate market has not been as hard hit as many other markets around the country during the housing correction but realistic expectations dictate that prices have not increased by 7.7% within 45 days of taking possession and there are other costs associated with selling a house that need to be taken into consideration in order to turn a profit.
Even the flipping TV shows on HGTV and other cable networks are starting to show the difficulties involved with flipping and most of those are focused on taking possession, undertaking improvements to add value and then attempting to make a profit. Here it appears to be simple misguided greed and while I feel badly for the sellers, they must have been watching reruns from 2004 and 2005 to attempt this.
Oh, please turn out the lights, close and lock the door on the way out of the building. Flip / Flop.