25% flipping tax??? Not cool.
Residential Real Estate Agent · Phoenix, AZ · Member since 2016 · 154 posts · 117 votes
Let's not get into politics but since we're all like minded-ish investors, read this and let us know what do you think of forcing market changes, area changes, affordability, excessive taxing etc?
https://theweek.com/speedreads/865930/bernie-sanders-proposes-25-percent-house-flipping-tax-new-housing-plan
I really don't get why folks vilify flippers. When a hoarder home or chopshop with illegal squatters is turned over, that does nothing but a) reduce neighborhood crime b) increase values of the 10 houses to the left/right and across the street c) increase the safety of the neighborhood, and d) remove blight. Often this is above/beyond the power of local law enforcement to accomplish the same.
When I see a house purchased by an anonymous LLC in my neighborhood and then see all the workers show up, and I start hearing those loud construction noises at 9:01 AM from a block or three away, it makes me genuinely happy. This is a good thing for me, not a bad thing. And do I spite that flipper for making a buck? Heck no, and odds are I made a buck too, in terms of what I could sell the house I own for!
In my particular case I'm in the SF Bay Area, so that blighted house being turned over (maybe we should stop using the word "flip"?) is probably also increasing the housing supply, something much needed around here.
@Isaac S. Cool it with the personal attacks. It's not about you, it's not about me, it's about the people trying to live their finite lives in a nice part of the continent. You can be there too, the goal should be to make room for everyone. Maybe land is a finite resource, but housing isn't. And so Survival of the Fittest doesn't need to apply to it as much as you imply it does. If supply is too low, the long term solution isn't to lower demand (make people leave or be homeless) but to raise supply. California clearly has a problem. Nobody here thinks they're solving it the right way. But the victims are the ones at risk of having to move or become homeless, not the ones who are going to pass along the added costs anyway because bargaining power in CA is that one-sided.
Now about avoiding the 25% flipping tax if you don't want to go into the land lording business... Could you say, join a partnership where you do the flip and the partner(s) landlord and contribute capital to keep the buying going? You'd need enough partners to have enough capital to keep yourself busy through the five year rolling buffer. This plan would mostly fall apart if the bubble bursts within five years. But you believe in your buys because you operate on fundamentals and not speculation or worse, a pump and dump strategy, right?
Wow...I'm realizing why this hits a nerve with me. Your intentions are honorable and a great ideal to work towards. Everybody gets a beach front house in Malibu, or beautiful mansion in Beverly Hills.
Are you a bigot? Why do you generalize all homeless or all landlords as single consistent homogeneous group?
Do you realize that about 50-70% of homeless refuse shelters because they have restrictive policy regarding drug and alcohol use? Of that group most would qualify for housing assistance but they wouldn't be able to spend their discretionary money on drugs, so they refuse the programs because the programs hold them accountable and expect them to use their income towards housing, food, and daily needs, before heroin or vodka.
There are close to 50k homeless in the greater Los Angeles area...even if you built 100k apartments in the next week, there would still be 30-40k homeless in Los Angeles.
The real irony of this all...is that 30% of homeless that are extremely vulnerable mentally disabled population and truly need our help. People that test on the extreme low end of the IQ bell curve and were raised in foster care and then dumped on the street at 18 years old, with no work or life skills, after being overlooked by the school system and barely surviving the foster care system or they just simply have a severe mental disability.
In the 1980's Reagan closed down all the sanitariums(the places like mental hospitals, for non-criminals and non-violent) to save on budget and reduce deficits, blah, blah, blah, but unfortunately when other politicians(from both partys) later jacked up the same budgets and taxes and even increased spending far past the Reagan cuts, eliminating any savings from the cuts, nobody thought to replace the eliminated services for the truly needy, the ones that wouldn't be able to get an apartment or a job(or would be limited in their options) even with supervision and training in doing.
The reason I get so angry at you and your comments is because your solution and perspective is constantly blaming and vilifying the competent and productive of our society. You are considering all homeless as the "victim" class and all landlords and investors as the "oppressor" class. As if somehow all people in each group are the same based on that criteria. It's textbook Marxism identity politics.
You think that by taxing the oppressor group you will heroically save the victim group, with our all knowing parents, the government, supervising this hyper efficient transfer of wealth. I got news for you, it doesn't work that way, ever...you will never(in our lifetimes) be able to show me an example where it does work. It would require a total shift in human nature.
With 8 billion people on the planet there are no more simple solutions. Just raising taxes does not help if politicians pork barrel the money or just waste it because they are not held accountable. You can't just expect to provide everybody that wants to live in Malibu, a chance to live in Malibu, or all of Los Angeles for that matter.
Do you understand that any given geographic location has a maximum capacity for the amount of poop it can process, the amount of water it can provide, the amount of resources it can exploit. Who decides how many people is enough? What quality of life should the more productive sacrifice for the less? Why not let a competence hierarchy naturally sort out?
If we could of taxed our way out of this problem, we would have already. I am at close to 50% combined tax rate and when you factor in taxes like, property taxes, gas taxes, sales taxes, etc. How much more would you have me pay?
Best of luck trying to find the answers! Just realize life is not as simple as homeless people are good and righteous and real estate investors are greedy and evil.
Got to pay for the green new deal. Or Bernie's new Mercedes.
"There are close to 50k homeless in the greater Los Angeles area...even if you built 100k apartments in the next week, there would still be 30-40k homeless in Los Angeles."
People don't need to be homeless to need relief from being house-poor. For every homeless person, there's many times more people who work 60+ hour weeks (in good high-paying technical jobs, not just low level service work) to get by, or who have given up and left the area. If 100k apartments isn't enough, build another 100k.
"The reason I get so angry at you and your comments is because your solution and perspective is constantly blaming and vilifying the competent and productive of our society.""How much more would you have me pay?" - None, just don't pump and dump a property you think will crash within a few years. That is the goal of the proposed tax.