Posted by: Timothy Ellis (The Tim)

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

23 responses to “Flipt Off”

  1. wreckingbull

    One does not need a support vector machine to conclude that we are now officially in a real estate and tech bubble, concurrently. I suppose it is a little more nuanced this time around, (i.e. no strippers becoming loan originators), but bubbles nonetheless.

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  2. Kary L. Krismer

    I guess that means I wasted money last week buying the Killow.com domain name.

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  3. softwarengineer

    Sign of the Times

    As the money dries up over time, the criminal behavior will get worse.

    I’m sorry to hear Zillow likely gets stuck with legal costs to fight this proprietary data lawsuit, that wasn’t their fault. Based on their behavior, I doubt Flipt has the resources to give Zillow relief on the legal costs. Correct me if I’m wrong.

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  4. Kary L. Krismer

    Some of the tech ideas are getting a bit strange. For example, a company that allows someone else to shop at Costco for you and then deliver the products to you. Amazon can deliver products to you because they have fairly efficient warehouse systems and then use delivery companies. The difference is like the difference between having a messenger deliver a document across the state and using the post office.

    The industry I’ve been following over at Geekwire though are the rideshare companies. Seemingly the case of companies run by programmers with absolutely no business sense convincing very gullible, ignorant and/or desperate people to use their cars as taxis. But the companies purportedly are valued in the 10 figure range–totally nuts, but that payoff is their motivation.

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  5. wreckingbull

    RE: softwarengineer @ 4 – I am withholding judgement on this exact story, but as to your subject, in “Manias, Panics, and Crashes”, the late Charles Kindleberger addresses this. It is usually toward the end of a bubble where you start seeing problems.

    And I quote:

    “The inference from the historical
    record is that swindles are a response to the greedy appetite for
    wealth stimulated by the boom; the Smiths want to keep up with the
    Joneses and some Smiths engage in fraudulent behavior. As the monetary
    system gets stretched, institutions lose liquidity and unsuccessful
    swindles are about to be revealed, the temptation to take the money and
    run becomes virtually irresistible.”

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  6. Ardell DellaLoggia

    RE: softwarengineer @ 4

    Actually Trulia started as a “scraper site” where they simply scraped the data off any and every website. That is the main reason they were “born” in San Francisco but opened first in NYC. NYC had no mls system. Maybe still doesn’t because they don’t promote cooperation between agents. They sell their own listings.

    I’m 99% sure it was perfectly legal to scrape that data from the internet. So I’m not sure if this is legal or not. In the previous example someone pulled Redfin’s code. But if they are simply scraping publicly available data…is it illegal? I don’t think so.

    In fact here is just one example of how they freely admit to a site they are scraping that they are doing that and even give some of the parameters they use to scrape. That was the original difference between Zillow and Trulia who are the two largest sites of their kind and who have always been competitors. Zillow created the site from pulblic data mostly, originally, and Trulia started by scraping agent sites.

    http://www.trulia.com/voices/Using_Trulia/If_you_are_scraping_our_website_and_posting_the_li-176532

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  7. Macro Investor

    The economy has been stressed for the last 5 years, and arguably for the last 40. The pressure is causing companies and people to use more and more extreme measures to survive and grow. That means charging more for providing less value (think half full cereal boxes), and outright scams.

    Recently a local auto dealer tried to charge me $1400 for a repair that wasn’t needed. A few years ago, a major tire retailer tried the same thing for $800. I caught on both times… but you really have to watch your back. Especially stock market deals these days. Unless a stock PAYS A DIVIDEND you are buying a piece of paper and a promise.

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  8. drshort

    By Ardell DellaLoggia @ 7:

    I’m 99% sure it was perfectly legal to scrape that data from the internet. So I’m not sure if this is legal or not. In the previous example someone pulled Redfin’s code. But if they are simply scraping publicly available data…is it illegal? I don’t think so.

    It’s not illegal in a criminal sense, but if it violates the website’s Terms of Use, then it can be a civil violation and Zillow could be awarded damages and/or an injunction.

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  9. Ira Sacharoff

    By Macro Investor @ 8:

    The economy has been stressed for the last 5 years, and arguably for the last 40. The pressure is causing companies and people to use more and more extreme measures to survive and grow. That means charging more for providing less value (think half full cereal boxes), and outright scams.

    Recently a local auto dealer tried to charge me $1400 for a repair that wasn’t needed. A few years ago, a major tire retailer tried the same thing for $800. I caught on both times… but you really have to watch your back. Especially stock market deals these days. Unless a stock PAYS A DIVIDEND you are buying a piece of paper and a promise.

    And yet, a lot of non dividend paying stocks are selling for way beyond reasonable prices, and some of them aren’t even profitable, let alone dividend paying. But even many of the Dividend Aristocrats, stocks that have been increasing dividends for 25+ years, are seemingly overpriced. But at least there’s some measure of safety with those.

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  10. Kary L. Krismer

    By Macro Investor @ 8:

    Recently a local auto dealer tried to charge me $1400 for a repair that wasn’t needed. A few years ago, a major tire retailer tried the same thing for $800. I caught on both times…

    The first has been happening since before I learned how to drive. Nothing new, so it indicates nothing about our current economy.

    I’d like to know more about the second. Some of the things they might do are legitimate, like not selling tires with a speed rating lower than what the car was spec’d, or wanting to replace all four tires on some AWD/4WD cars if the other tires are sufficiently worn. Following such practices is better than not and then being sued and wishing they had.

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  11. Erik

    RE: Macro Investor @ 8
    Ya, so far those distressed european banking stocks I bought weren’t such a good idea. Hoping the second half of the year will be a better story. My only good stocks are the mutual funds that buy low and sell high automatically. I really am a moron like you say when it comes to these stocks. Once I break even, I am out.

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  12. Jay

    RE: Erik @ 12 – I hope you will get a better return in the future. May I ask you something about renovation? Is it expensive to fix a house with some noticeable cracking in the foundation? If anyone had experience with that, I would love to hear your feeedback. Thanks a lot!

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  13. Ardell DellaLoggia

    RE: Jay @ 13

    When I have a crack in a slab or foundation that I discover and am going to “conceal” in some way, I call an inspector or structural engineer to be sure it is not a problem before moving forward. Concealing a defect in order to sell a house is a huge no-no. Often it is not an issue, but you want to be sure.

    The last time I had this on a house I was selling for someone else we ripped up the carpet in the family room of a tri-level where the family room is on the lower level on a slab vs crawl space. There were several cracks I wanted to fill before the new carpet was installed. The inspector came in and checked everything, in this case in the adjacent crawl space under the kitchen level as well, and ok’d everything before the cracks were filled.

    If it is a foundation crack, even more worrisome. However most inspectors and structural engineers do say to fill the crack and check it again in six months to see if it cracked again. That is often one of the only ways to know if it is an old settlement crack or an ongoing issue.

    It’s usually better to leave it alone if you are going to fix and flip in a short time so that the buyer’s inspection can pick up on it and make a determination. If you conceal it then they don’t have the opportunity to catch it and get an opinion on it. Concealing known defects, as I said, is VERY BAD.

    I use Dave Pioli at Criterium Engineering if it is a foundation crack as he is one of the few Structural Engineers who is reasonable and also does home inspections. Sometimes it’s a $10 fix and sometimes it’s a $100,000+ problem. So you don’t want to mess around with foundation cracks without an expert opinion. OR just leave it alone so the buyer can have it checked out.

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  14. Erik

    RE: Jay @ 13
    Push hydraulic cement in the cracks and paint it with a waterproof sealer. You don’t want water to erode it and make it worse. I did that and it worked great. You will make the problem a little better if you can keep the water out.

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  15. Erik

    Don’t buy it! Too much risk. Anything foundation could mean big bucks in renovation. People pay for beauty. Foundation, plumbing, electrical don’t add beauty and you won’t get your money back. Buy something 1978 or newer with no foundation problems. Get something that needs paint, carpet, appliances, windows, doors, yard, etc.

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  16. drshort

    I’ve owned two houses built prior to 1930. Both had sizable cracks in the foundation. But those cracks were decades old and not moving. Foundations of that era had no rebar so cracking is somewhat normal. A 100 year old house with no cracks is probably the exception.

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  17. Erik

    RE: drshort @ 17
    The house I used hydraulic cement and waterproof sealer on was built in 1906. Their was a basement and the hydraulic cement and waterproof sealer stopped the leaks. Both things can be purchased at home depot, lowes, etc. There was separation between the wall and the ground. I roto-hammered the crack and stuffed hydraulic cement in it. Then I painted over the repair with drylock. I also did that for the cracks in the wall.

    http://www.drylok.com/formulas/latex-base-drylok-masonry-waterproofer/
    http://www.zoro.com/g/00060865/k-G3649633?utm_source=google_shopping&utm_medium=cpc&utm_campaign=Google_Shopping_Feed&kpid=G3649633&gclid=CKnps_K3y74CFQIT7AodnDsAcg

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  18. softwarengineer

    RE: Ira Sacharoff @ 10

    That’s Why I Only Use a Matched Funding With Little or No Load and Invest in General Stocks Funds, Not Single Ones

    Keeping to this rule since 2001 has allowed me to gain a 2nd income in dividends for 2013 [whose haughty, I could lose a big amount soon too]…my rationale is bring in the dividends, don’t pay the broker or gamble 100% [if I lose 50%, I still have my half] of cash savings.

    Would I gamble in stocks without matching funds?….probably not.

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  19. softwarengineer

    RE: Erik @ 18

    That Fix Is better Than Doing Nothing

    A very small earthquake or shift in a sloped lot [especially without big tree roots in your yard keeping it from shifting] will make those foundation cracks re-appear overnight…..the patches don’t incorporate rebar and are very weak from normal foundation stress changes and sinkholes. Visible chimney crack repairs are useless, the interior cracks are inaccessible/invisible for patching…..making the chimney a “fire hazard”. Tear it out and replace it with a new chimney.

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  20. Ardell DellaLoggia

    RE: Ardell DellaLoggia @ 7

    I just received an FTC report/white paper on Data Brokers titled “A Call for Transparency and Accountability”. Seems to be “hot of the presses” as it is dated May 2014. I don’t have a link as it is a PDF document, but if anyone is interest I can send.

    In light of this and other changes past, present and future, pointing to something done in the past and even recently (as I did in my comment #7) may not be an indication that their successful process can be replicated.

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  21. Ardell DellaLoggia

    RE: The Tim @ 22

    Thanks Tim!

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