I think the key is that unless you’re already a general contractor, you’re a speculator. There exists people fixing shitholes to be livable, but those guys margins come from the fact that they already are in the remodeling business and can fix it for cheaper. I’ve worked with both types in building supply.
Yes, if you have some process efficiency, like you’re a GC who knows exactly how to fix it up as nicely and efficiently as possible because you already have a crew of workers in the area or something then you might actually be providing a service.
But even in that case you might not be if you do a shitty job renovating and drive up the price more than the value you provide. If you say, cover up structural or water damage but make the house look nice and new, you may still be doing a net disservice to society by making someone else both pay more for the house and then pay even more to fix your mistakes later, then if they had been able to buy it cheaply and fix it up themselves.
Plus there’s always the added cost that if a GC designs something a certain way, the eventual homeowner may still want it a different way, which then still doubles the overall cost when you have to redo a decent renovation.
It’s why the overall effect of house flipping is generally to drive up home prices unnecessarily when you examine it at a systemic level.
I think the key is that unless you’re already a general contractor, you’re a speculator. There exists people fixing shitholes to be livable, but those guys margins come from the fact that they already are in the remodeling business and can fix it for cheaper. I’ve worked with both types in building supply.
Yes, if you have some process efficiency, like you’re a GC who knows exactly how to fix it up as nicely and efficiently as possible because you already have a crew of workers in the area or something then you might actually be providing a service.
But even in that case you might not be if you do a shitty job renovating and drive up the price more than the value you provide. If you say, cover up structural or water damage but make the house look nice and new, you may still be doing a net disservice to society by making someone else both pay more for the house and then pay even more to fix your mistakes later, then if they had been able to buy it cheaply and fix it up themselves.
Plus there’s always the added cost that if a GC designs something a certain way, the eventual homeowner may still want it a different way, which then still doubles the overall cost when you have to redo a decent renovation.
It’s why the overall effect of house flipping is generally to drive up home prices unnecessarily when you examine it at a systemic level.