Flipping in Seattle for Fun and Profit

Are prices in Seattle based on strong fundamentals or speculation? While we can certainly look at the data and draw conclusions for ourselves, there is little to no hard information out there about how many people are buying merely to turn a quick buck.

There are those that treat the lack of hard data regarding speculative buying as evidence that there is little to none of it occurring in Seattle. I highly doubt that is the case (for reasons discussed here numerous times before), but even if we assume that it were true up to this point, I’m inclined to think that speculation in Seattle is on the rise.

Exhibit A: Thursday’s Seattle P-I front-page story about a local flip:

The last time Al Johnson was inside the house at 4425 Cascadia Ave. S. in Columbia City, there were no walls.

“You’ve done a nice job,” Johnson told owner Thomas Loeser after touring the rehabilitated 1911 Craftsman house Monday.

Johnson, an associate broker with Windermere Real Estate, was the listing agent who sold the “extreme fixer” in February to Loeser and his brother, Derek — lawyers when they’re not fixing up houses.

In recent years, many developers have fixed up run-down houses and then put them right back on the market. The Loesers’ house offers an extreme example.

They paid $315,000 for the run-down abode Feb. 20 and put it back on the market for $549,000 last weekend. Thomas Loeser wouldn’t say how much they spent on renovations, but acknowledged that one agent who said back in February the house would take $150,000 in work wasn’t far off.

Johnson speculated just before the sale that the house, once fixed up, could fetch $150,000 over the sales price in the current market — at most.

So, $549,000?

“Let’s see what happens,” Johnson, who is not representing the house this time, said Monday.

Exhibit B: #1 on Forbes’ latest list, “Best Places to Flip a Home“? You guessed it… Seattle!

Flipping—in which an investor buys a home, makes quick improvements and resells at a higher price—”was a rage in the housing market surge,” says Anthony Sanders, a professor of real estate finance at Arizona State University. “But it is not as popular in this flat housing market.”

It’s easy to understand why. With prices falling quarter after quarter, the prospect of buying low and selling lower doesn’t sound nearly as appealing as buying low and selling high.

However, those looking to make a quick buck may do so in a number of markets ripe for a well-spotted flip.

Best among them is Seattle. It landed atop our list based on a number of measures.

I’m not a violent person by nature, but part of me would really like to gut-punch these reporters that are encouraging people to go out there and jump into Seattle’s already-stalling housing market to try to turn a quick buck. The days of easy money from flipping real estate in Seattle are over (if they were ever even here to begin with).

Exhibit C: Anyone seen or heard from “Seattle Eric” lately?

(Aubrey Cohen, Seattle P-I, 07.25.2007)
(Matt Woolsey, Forbes, 07.26.2007)

P.S. (For those not in the know, Seattle Eric was the proprietor of a blog titled Tales of a Seattle Real Estate Investor (formerly located at this address), where he chronicled his quest to flip houses in Seattle for fun and profit. He was also a contributor over at Rain City Guide for a short while. The last time anyone heard from him, he had gotten out of the flipping business to become a real estate agent, and was still having trouble unloading a few of his houses.)

Addendum: Be sure to check out a relatively new Seattle-area blog that focuses specifically on local flips: ReMuddle. I have added a link to them on the sidebar under Bubble Sites -> Regionals. Thanks to RedmondJP for pointing them out in the forum. Speaking of the forum, also be sure to check out the long-running thread on this very subject: Audacious Flips and Renovations.

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About 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. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.


  1. 1
    Grvetti says:

    I ran across this very entertaining site when I parused the ‘sound-off’ section of the PI for that first ‘exhibit A’ article…

    A nice anecdotal howler of a site, similar to ‘burbed’ with its biting does of sarcasm but focused on the Seattle flipper scene. Tim’s added it to the sidebar, but in case you haven’t discovered it yet…


  2. 2
    The Tim says:

    Oh yeah, thanks for reminding me about that. I saw JP point it out in the forums, and added it to the sidebar, but I should add a mention of it in the post as well.

  3. 3
    biliruben says:

    One of the best places to get a feel for the level of speculation is the pokers tables in Shoreline and Mountlake Terrace.

    1 – Obviously a lot of folks who like to gamble.
    2 – A bunch of amateur and professional construction/developer types, that are flush with money from the recent run-up.
    3 – The education level is low enough that flips are seen as one of the few ways to really get ahead with the sweat of your brow.

    For the last few years, I’ve sat next to a lot of folks making money in Real Estate, bragging about their profits.

    It isn’t slacking off, but it seems like a lot of amateurs and just now jumping in and taking a stab at riches.

    My dealer a few days ago, was talking about his first renoflip out in Sultan, which only needs some minor foundation work and then he’ll do “really well on it”.

    I’m sure the market for overpriced amateur renovations in Sultan is hella-strong and will continue to boom through the fall when this guy claims he’ll be ready to put it on the market.

    The other contractor types who knew a bit more seems to be full of derision for his plan. I think those in the know, realize the easy flip opportunities are a thing of the past, and are starting to sit on the sidelines, letting the amateurs take a bath.

    I just hope the dealer doesn’t have a family to support.

  4. 4
    nateboy says:

    This is very interesting considering that even cnn is trying to come to terms with a housing reality far different than presented by these reporters. At a conference a few months ago, I spoke with a person who was gutting a home in Ballard to turn it into a tri-plex. 1100 for the basement, 1200 for the cottage out back. The owner then would live in the third place for a year or so then sell it for a profit and find a ‘bigger’ house.
    This type of outlook qualifies as more than sheer exuberance.Why would I want to live in a basement apartment in Ballard for 1100 if I was forced to do so? Or A cottage in the back….??

  5. 5
    Chris says:

    But at least people who buy renovate and flip are adding value. for a while there, people were buying homes, doing next to nothing (paint and lawnwork?) and flipping. In land constrained environment, renovating old homes is one of the few ways to create desired SF units.

  6. 6
    biliruben says:

    Judging from some of the homes a looked at 3 years ago that were reno-flip, the value-added was dubious at best.

    Some of the renovations actually decreased to the quality of the home, imho, because they were done so sloppily with such cheap materials. I would have had to rip them out if I had bought them.

  7. 7
    kpom says:

    I always thought that a lot of these “renovations” served as sort of a magic wand – if you claim that you did something to improve the house, then you can deny that you are engaging in naked real estate speculation, even if that’s exactly what you are doing.

  8. 8
    kpom says:

    Or look at Matt Goyer at Urbnlivn, who is trying to flip a condo – bought it for $345K in February, now trying to sell it for $385K (down from $390K). He’s already bought another condo – I doubt that he is the only one doing things like this.

  9. 9
    softwarengineer says:


    Dr. Roubini [Clinton’s old economic Guru] predicted a stronger Q2 and guessed right again, but attributes the GDP bubble growth to short-term corporate inventory grabbing and a hefty approx. 4% federal debt money insertion into the economy, while oil is relatively still stabilized [compared to the future], albeit H2 GDP growth is a different scenario and with oil prices now on the rise with retail sales sluggish since June; Dr. Roubini predicts more foreign deficit severely weighing GDP growth down the remainder of the year. He’s batting about 800 in his predictions, we’ll see. I’d add the GDP growth is way overly optimistic anyway; it excludes things like Seattle viaducts needing replacement, army equipment wore-out and America’s pot-holed roads, etc….

    Its a rough economic gage and H2 looks grim indeed.

  10. 10
    deejayoh says:

    A friend of mine looked at the property that was highlighted in the first article. He said there were seventeen offers on it!

  11. 11
    CRichard says:


    I agree whole-heartedly about MLT and flips. I looked at county records for 3bd-1bth ramblers sold from Aug-Dec 06, and 29% (14/25) were to “Investors” (e.g., not primary tax address, or indicated as NOO on mortgage). Another interesting finding: 35% of all 3-1s were bought with more than 98% financing. Good luck finding new buyers in this lending environment.

    Put a fork in this market. It’s done

  12. 12
    Joel says:

    Another interesting finding: 35% of all 3-1s were bought with more than 98% financing.

    I’ve always wondered, how one finds out what kind of mortgage people have used.

  13. 13
    S-crow says:

    I know of a small handful that are going very sideways– both pro’s and 1st timers in the flip game. Financed with little down, nothing & neg. am.’s. In my view really the story is that the homes were purchased too late in the run-up.

  14. 14
    CRichard says:


    This is the link for Sno Co public records:

    Mortgages are “Deeds of Trust”

    There is a link to the County parcel look-up on the sidebar.

  15. 15
    redmondjp says:

    Yes, related to this, I just looked up the county records on the four new houses down the street from me to see what is going on — some definite flippage in the works for sure!

    On one, a person bought from the builder last August for $970K, and flipped it in June of this year for $1.15M. Wow!

    This very same person more recently bought one of the other four new houses from the builder (one of the final two which were built) in April for $1.1M. Will they keep this one to live in or try to flip it for even more? Time will tell . . . place your bets now!

    Of the remaining two houses, the first one completed sold for $999,950 last July, and is ‘FSBO’ (last time I checked, at $1.1M), while the most-recently completed home just went for $989,950 in June of this year. This seems like a bargain, considering that the two neighboring houses above (one the same size, one slightly smaller, see below) both went for over $1M.

    The insanity keeps reaching new heights (I had this exact same feeling when Microsoft stock was doubling every 6 months, kicking myself for not buying any but then knowing that it had to end at some point). The fact that the most-recent sale was for less than $1M tells me that we may be at or near the top (one can only hope, eh?).

    BTW, these houses are all 3750 sq. ft. 5/2.5 or 2.75 except for the one which was just flipped, which is 3300 sq. ft. 4/2.75. Each crammed onto a 7K sq. ft. lot.

  16. 16
    wreckingbull says:


    Anyone dumb enough to buy that revamped Columbia City crackhouse will have broken almost every real estate axiom in the book, especially, “Don’t buy the nicest home in the neighborhood”, “Location, Location, Location”, and most importantly “Don’t pay too much.”

  17. 17
    Ravenor says:

    I loved this quote from the realtor: “But Loeser said there’s no reason a nice house in that area shouldn’t sell for $549,000. “I think what this neighborhood needed to sell a $500,000-plus house was a $500,000-plus house.””

    At least the neighborhood kids won’t have to worry about the “scary” house:)…wreckingbull is right on the money.

  18. 18
    Grivetti says:

    Anyone dumb enough to buy that revamped Columbia City crackhouse…

    Hey! Watch it!… its not a “crackhouse”, its a “crackhome

  19. 19
    Chris says:

    Did anyone figure out what happened to Seattle Eric?

  20. 20
    Garth says:

    I found when we were looking that flippers are much more likely to hold a staged open house we quit going to open houses because the prices were too high, and the owners on site doing a high pressure sales pitch. The variety is pretty amazing, though the ones done by individuals or couples usually just involve cosmetic changes and bad paint jobs.

    My favorite was a three story house they called 1800 square feet. The basement had all sorts of concrete remnants of assorted coal bins and a huge bolder (15feet across)coming up about 3 feet in one corner. They redid the attic and put in a spiral staircase, and a deck with steep outside stairs on the top floor. The owners were there to tell you about the new ikea cabinets and that you would stop getting dizzy on the stairs after a while. They wanted 550 :)

  21. 21
    Brian says:

    I think people are oblivious to the growth in house values happening in Columbia City right now. It’s convenient closeness to the eastside and downtown makes it a prime area for investing, especially with all the gentrification going on over the past few years in neighborhoods like New Holly, Othello Station, and Columbia City’s Rainier Vista.

  22. 22
    Lionel says:

    I was in Gig Harbor today visiting my MIL. I don’t know if this is a hotbed of flipping, but it seemed as if ever other house was for sale.

  23. 23
    BanteringBear says:

    Hi Lionel. Yes, Gig Harbor has been flipper heaven for several years now. I know of a realtor there who was making a killing (a real snotty woman). The music has now stopped, as is evidenced by the sky high inventories. I hope the bagholders enjoy their cash burn because the buyers they are looking for are nonexistant. It’s curtains for Gig Harbor.

  24. 24
    Lionel says:

    Bantering Bear, always good to hear from you. You’d kindly asked months ago about my move to Seattle, but I hadn’t made it up here yet. So far, so wonderful (though I’ve heard rumors the weather isn’t like this year round).

  25. 25
    Lionel says:

    PS – saw a lot of vacant land in the Gig, so the argument that they’re running out of land appears to be specious.

  26. 26

    […] Seattle Bubble blog pointed me at this article from Forbes listing Seattle as the best place in the US to flip a house. […]

  27. 27
    david losh says:

    Good Morning!
    Let’s look at the numbers. $315K to buy, $150K to fix, and the thieving Real Estate agent is in for 6%. On a redo 6% for the liability is cheap (Only God knows what is going on behind the sheet rock). Then you have holding costs, excise tax, and selling costs. I figure the end result is a $515K product.
    Let’s pretend there is a $50K profit, oh yea they need to pay Capital Gains tax or 1031 Exchange into another project, that works out to be a little less than $10K per month for six months. All said and done it would be $100K per year if they did two a year.
    OMG, LOL, BTW, that’s a tough way to make a buck.
    You made an excellent point about how the media distorts the realities of rehabbing properties. I look at it is as an alternative to new construction. If these boys would have torn down a $315K house to build a bigger new house, the price for the new would be roughly three times the land acquisition cost. In a way redone houses help keep pricing for housing units down. I would rather own a redo than a town house.
    The people in Seattle need to come to grips with the fact we do live in a bubble. We say North of down town is good and south of down town is bad. Why is that? Why is Nortgate a $500K neighborhood and Columbia City is not?

  28. 28
    mike2 says:

    Why is that? Why is Nortgate a $500K neighborhood and Columbia City is not?

    It’s a matter of who lives in the public housing nearby.

  29. 29
    TJ_98370 says:

    BanteringBear, Lionel or other,

    Interesting that you mentioned Gig Harbor. What’s your general opinion regarding the effect of the opening of the new Tacoma Narrows bridge on the market in Gig Harbor and South kitsap?

  30. 30
    Lionel says:

    TJ, I’m newly arrived to Seattle, so I can’t say for sure. All things being equal, it would have to improve quality of life. I know my MIL’s commute to Tacoma has improved dramatically since the new bridge opened. Of course, I don’t believe all things are equal, and the housing bubble will mitigate any positive effects of the bridge (at least for the next three or four years).

  31. 31
    TJ_98370 says:


    You mentioned that there were alot of for sale signs in Gig Harbor. I’ve got no data to support my opinion, but I believe there is / was alot of speculation going on in Gig Harbor / South Kitsap in anticipation of hordes of eager house buyers once the bridge was completed.

  32. 32
    Pgniss Mcgee says:

    I’ve seen houses on Queen Anne selling for as low as 550k 700K and, of course, way on up from there. QA vs Columbia City is not even a contest, but only people who didnt grow up here would know the differemce. Columbia City is still borderline and will go down in a downturn. From QA you can walk to the Seattle Center, and bus to downtown in five minutes. There is absolutely no contest. There are some cool bars in Columbia City, but not worth $549K to live in a borderline area.

  33. 33
    flippedout says:

    >Did anyone figure out what happened to Seattle Eric?

    Eric Bozinny appears to be contracting at Microsoft recently.

    Unfortuately, he bailed from Acquantive a few months before they were bought
    by Microsoft – so if he left Acquantive with a lot of stock options on the
    table he probably lost out big time – the stock more than doubled after he left!

    He is still trying to unload his Seaview flip (600K, 235days on Zillow):


  34. 34
    The Tim says:

    Actually that’s not accurate. Just today I got an email from Eric, detailing his post-flipping adventures. If you pull up the Snohomish County parcel data on the property mentioned above, you’ll see that it sold back in April, for 10% under asking.

    I’ll probably make a post sometime this week with the post-blogging epilogue to Seattle Eric’s story.

  35. 35
    Seattle Eric says:

    Boy, amazing how rumors and bad information flow.

    1) Seaview is sold. I just never took it down from Zillow (and apparently listings don’t automatically sunset).

    2) I’m a bluebadge at Microsoft, not a contractor.

    3) I was at aQuantive for 9 years, its 6th employee. The options I left behind were minimal compared with the amount of stock I own outright. Let’s just say enough to buy a couple of new Mercedes (CLS 63 AMG & S550)with cash without much of a dent.

    I’m all but out of the real estate world (save for a few investments). Not sure how Tim plans to publish my longer epilogue (comments or post), but it will have more detail on the good and the bad (and yes, Seaview was baaad). :)

  36. 36
    flippedout says:

    Cool – thanks for the update, I’m sure many of us were wondering how your flipping story turned out. Sounds like you came through the experience fairly intact.

  37. 37
    Eric says:

    I regret the reference to the autos. It’s not in good taste, and rather boorish.

    If I were you, I’d think I got washed up and went broke based on how my real estate experiences were heading.


  38. 38

    […] it would seem that my most recent mention of him was finally enough to bring him out of the shadows. Eric emailed me shortly after that post, and […]

  39. 39

    […] You may recall Seattle showing up frequently on previous such real-estate-related lists, such as Best Places to Flip a Home (#1), Richest Cities In The U.S. (#8), Best Cities For Jobs (#34), and Most Overpriced Places In […]

  40. 40

    I say look into short sales. In my area investor and agents are doing pretty good with short sales. Its takes time and you wont get every property but its a great way to find a good deal.

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