You may not have known what you were looking at. You may have thought it was a just a young home-owner renovating their property in some sort of quazi-mid-century-modern assetic. However, there is a good chance what you were really looking at was a "flip".
As the Eastsider.com so elequenting asks:
Has that run down house next door been painted in shades of olive green or gray? Has the rusty chain link fence been replaced by unpainted, horizontal wood slats? Is the front door now a shiny red, orange or chartreuse?
If so, then your neighborhood has been "flipped".
The general strategy for this type of investment is to a buy a distressed home for all cash in the $100,000 to 200,000 price range. Short-sales, probates and foreclosures all make great targets for this type of investment.
The new owner then spends 90 days or so, and roughly $50,000 - $100,000 upgrading the property. This new buyer then re-lists and sells the home in the $319,000 - $499,000 price range.
As with ANY transaction - Caveat emptor - buyer be warned. Companies such as Modopdesign.com and Better Shelters appear to be good "flippers", are doing solid work on their properties and have a good reputation in the communities where they do business. Of course there are also those unethical flippers who are cutting corners, hiding problems they find during renovation and attempting to sell an inferior product at an inflated price.
As with every real-estate transaction, I would recommend using a local real-estate professional who is ethical and comes highly recommended.
Some buyers who have gotten swindled, and some community leaders who don't like this business model, have been quoted as saying "flipping" is bad and is out of control in Los Angeles. Many of these flippers do work without the proper permits and this frustrates local official. However, that is a topic for a future article.
Taking a step back and looking at the bigger picture, I personally don't see how making money off of rennovating properties, improving communities and increasing property values can be a bad thing.