Is This a Good Time for House Flipping?

In a recent fit of insomnia, I noticed a commercial enticing "smart investors" to buy information teaching them how to purchase pre-foreclosed homes and resell them at market prices. I found this commercial troubling for several reasons.

Profits claimed by house flipping specialists are exaggerated: The infomercial was geared toward teaching every day people how to purchase homes below market and resell them at market prices. While in this current economy, it is very possible to purchase a pre-foreclosure home in a short sale (for less than the buyer owes) to sell a home at market prices these days is a near impossibility. The "investor" will not get the kind of money out of the home that the infomercials claim.

The house flipping infomercial had a sleazy aura: The infomercial tried very hard to convince viewers that the scheme was ethical. They claimed they would be helping homeowners by buying their homes they could no longer afford. Meanwhile they used words like "take advantage" of the current rise in foreclosures.

The house flipping infomercial was only selling information and a dream. The reality of the situation is most buyers will only read the information and move on. Of those who do follow through and make the purchases, few will ever make a profit. Many may end up losing their homes themselves when they find they are saddled with paying mortgages on homes that will not sell. At best, they will end up renting out the houses instead.