Morality of Flipping Cars/Houses

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I bought a flipped townhouse. It was vacant for 12 years due to a deed dispute. The flipper got that straightened out and purchased it. She gutted it down to the studs.

Most things in my townhouse are new: walls, staircase, appliances, kitchen cabinets and countertop, bathroom countertops and cabinets, carpet, luxury vinyl in bathrooms, hardwood flooring in living and dining room, electrical wiring, and some of the plumbing. I will be replacing the HVAC system and one rotten window sill this year.

Overall, I’m satisfied with my purchase.
 
Your parents COULD lose a lot of money and be taken advantage of by an employee over the long haul. But has this happened to them?

Most business owners don’t keep losing for long and they fire bad employees. Risk is variable to the business, but it’s less than you think.

Take nursing homes for instance. It’s theoretically possible that a whole crop of elderly people could pass away in a given month. Then you could say, gee it’s a good thing I charged $3000 or $4000 per month. But in actuality, nursing homes have long waiting lists, and quickly another senior comes in. This is a good example of a company that cannot function without a lot of employees. But nobody passes out extra money when business is good or the price of gas to heat the rooms went down. Plus, if all else fails, you can sell the building. Perhaps you lose some money on it, but more likely, it has only slowly depreciated or the land has increased in value.
 
Lara said:
Your parents COULD lose a lot of money and be taken advantage of by an employee over the long haul. But has this happened to them?

Most business owners don’t keep losing for long and they fire bad employees. Risk is variable to the business, but it’s less than you think.

Take nursing homes for instance. It’s theoretically possible that a whole crop of elderly people could pass away in a given month. Then you could say, gee it’s a good thing I charged $3000 or $4000 per month. But in actuality, nursing homes have long waiting lists, and quickly another senior comes in. This is a good example of a company that cannot function without a lot of employees. But nobody passes out extra money when business is good or the price of gas to heat the rooms went down. Plus, if all else fails, you can sell the building. Perhaps you lose some money on it, but more likely, it has only slowly depreciated or the land has increased in value.
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The question is what families with people who need 'round the clock nursing care would do if there were no such thing as a nursing home. Do you think that nursing homes ought to all run as non-profits?

In your example of the failed business, the employees did their work and went home with their salaries, while the owner may have not only realized no pay for the work they did but lost the past income–the hours of work–they invested into the business. So you have someone working for guaranteed pay and someone working and maybe having to fork over money for their trouble.

If someone loans me money to start a business, I don’t see paying them back with interest as having been exploited by them. Provided the terms of the loan are mutually seen as fair, they risked what they owned to give me an opportunity to produce something worthwhile and by that to give value to someone else in exchange for the profit I realize. Everybody takes a chance in those transactions. There isn’t anything wrong with that, provided that everyone is given truthful information and is aware of the kind of information that the others they do business with are free to be discrete about. As for the people who are exercising discretion, that is fine, provided they remember that the Almighty sees all and knows if they are being fair to others or not.
 
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When you run a successful business and you follow you own rules, please tell us.
 
But that’s only theoretically. In actuality, the natural gifts/talents of the owner kick in. Again, how many hours have your parents really lost?

I’m not sure employees always feel they have guaranteed pay. When a company goes belly up, they are often the last to get anything if wages were held back.

I think if nursing homes make a lot of money, as I believe they do, they fit in with my theory that all businesses (with employees especially) are somewhat immoral and rely on taking advantage of somebody.
 
Lara said:
With a lot of these upgrades to houses, it’s putting lipstick on a pig. For instance, they put about $4,000 into the house, sometimes less, and then sell it for $100, 000 more.
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I think you are mistaken

The majority require a substantial investment and risk
 
I have taken some accounting and business courses. They do not address the issue of morality, unfortunately.

What is your point. Do you think that all risk should be richly rewarded?
 
Lara said:
Most business owners don’t keep losing for long and they fire bad employees.
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Really?:

“What Is the Small Business Failure Rate? 20% of small businesses fail in their first year, 30% of small business fail in their second year, and 50% of small businesses fail after five years in business. Finally, 70% of small business owners fail in their 10th year in business.”

From https://www.google.com/url?sa=t&rct...inesses-fail&usg=AOvVaw3F7mCyJpH8Hj-w2_xIPpk8

The first result I got when I searched “business failure rate”. I guess that sort of qualifies as not losing for long, if you mean they fail right away…
 
Lara said:
But that’s only theoretically. In actuality, the natural gifts/talents of the owner kick in. Again, how many hours have your parents really lost?

I’m not sure employees always feel they have guaranteed pay. When a company goes belly up, they are often the last to get anything if wages were held back.

I think if nursing homes make a lot of money, as I believe they do, they fit in with my theory that all businesses (with employees especially) are somewhat immoral and rely on taking advantage of somebody.
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So…if my parents hire someone to take care of them at their house, that’s moral, but if they go to a nursing home, that means their caretakers are being exploited?

That doesn’t even make sense.

So when the first came, they thought that they would receive more, but each of them also got the usual wage. And on receiving it they grumbled against the landowner, saying, ‘These last ones worked only one hour, and you have made them equal to us, who bore the day’s burden and the heat.’ He said to one of them in reply, ‘My friend, I am not cheating you. Did you not agree with me for the usual daily wage? Take what is yours and go. What if I wish to give this last one the same as you? Am I not free to do as I wish with my own money? Are you envious because I am generous?’
Matt. 20:10-15

It isn’t unfair if you get a fair wage for your work. You have no reason to envy your employer his profits. How much your employer gains or loses doesn’t change whether your wage is fair. Is it unfair, after all, for the business owner to work for a year and get paid nothing while you, the employee, goes away with a profit? No, provided everyone was honest, you each judged whether your risks and rewards were acceptable when you started.
 
if someone fixes up and old house and turns a good profit, i see no moral issue. it’s an honest living as long as it’s kept honest. if God blesses them, who am i to say anything bad about it.
 
JamesV.Cameron said:
Most people are too cowardly to risk much and so gain little, they’d rather have the security offered playing it safe, ie working for another person instead of themselves.
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It is not cowardly to choose to work for a wage instead of being in business for yourself. To be a coward is to fail to show courage when there is a duty to put fears aside and act. There is no duty to take work with the highest risk of gain and loss. It takes courage, but opting not to do that is at the discretion of the person taking the risk. It is certainly OK to take a guaranteed wage on someone else’s project. Why wouldn’t it be moral for people to decide they have differing tolerances for risk? Differing aptitudes for imagining and executing viable business models? Differing abilities to manage other people and their work?

Maybe the people who flip the houses employ contractors who take payment up front and know they’re getting paid whether the project is profitable or not. That’s OK, too.
 
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Lara said:
I think if nursing homes make a lot of money, as I believe they do, they fit in with my theory that all businesses (with employees especially) are somewhat immoral and rely on taking advantage of somebody.
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Nursing homes bring in a lot of money, but that is a factor of how much it costs to run one. They typically don’t make a lot of money, meaning the profit margin (if any - a large number of nursing homes are actually non-profit operations) is small.

So can you explain to me how providing a necessary service, handled by a large staff who make a wage agreed to by the staff (many of whom are highly educated professionals who can get jobs at any of a large number of places and consequently have good bargaining power when it comes to compensation), and charging a rate that is essentially break-even for many of the examples of that business, is taking advantage of anyone?
 
I will take your statistics as being true for a moment. Just because a business fails doesn’t mean the owners weren’t behaving immorally to begin with (on top of perhaps incautiously and incompetently). So, for example, a donut company in Oilville pays its employees minimum wage. Then the price of oil drops, nobody buys donuts anymore. The company ceases to function. They pay out the lease and leave. Guess what. They will be recorded as a failed business. But we would need to know if they actually lost much if anything. When they were making money, they were underpaying their employees. They probably made more than enough all those boom years to get out at the tail end.
 
Lara said:
Just because a business fails doesn’t mean the owners weren’t behaving immorally to begin
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And just because they don’t fail and make a healthy profit in no way means that they were. You cannot assume bad faith on all business owners. Every failure is different, as is every owner.
 
You are changing the parameters of the argument. In fact, around here, the caretakers at nursing homes run their tails ragged for low wages. They have too many people to look after. They can barely get to everybody who needs to use the washroom. So they put the seniors in diapers. Then when they start asking for a diaper change, they let them wait a long time because they are run off their feet.

If somebody comes to look after your parents at their home, they may or may not be exploited depending on how much they have to do for the money.

In that biblical example, we never find out what happens when the landowner tries to get employees the second day. In all likelihood, he would have trouble getting people to come in the morning. Plus there would be a lot of animosity between employees because they aren’t being paid correctly and fairly.
 
In theory, anybody can go anywhere else and get more money. In practice, every trade or job has finite amounts people can earn, and much competition for few jobs.

Anybody who works for another is likely being underpaid; otherwise they wouldn’t be hired. The boss makes sure he has enough profit at the end of the day and he keeps it, not spreading it around except maybe the bonus at Christmas. $50 or so for low wage people.
 
Lara said:
In fact, around here, the caretakers at nursing homes run their tails ragged for low wages. They have too many people to look after. They can barely get to everybody who needs to use the washroom. So they put the seniors in diapers. Then when they start asking for a diaper change, they let them wait a long time because they are run off their feet.
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The situation you are describing is unfair to the caretakers and the patients regardless of whether or not the business owner is making a profit, though. It wouldn’t even matter how high the pay was!! That isn’t a demonstration of why capitalism is inherently immoral (which it is not). That is a demonstration of an understaffed nursing home.
Lara said:
In that biblical example, we never find out what happens when the landowner tries to get employees the second day. In all likelihood, he would have trouble getting people to come in the morning. Plus there would be a lot of animosity between employees because they aren’t being paid correctly and fairly.
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They were all paid a fair wage. There is no reason to believe the vineyard owner would even need to go looking for employees on the second day, let alone that anybody could stand around and count on him showing up at the end of the day to hire those who refused his employment offers earlier in the day. (Nobody in the story refused an employment offer and got another one later.) Remember, these were the days before welfare. If you didn’t work, you and your wife and your children weren’t going to be eating.

You may as well say that nobody would want to become a Christian when they’re young, because why wouldn’t they wait to serve God until they’re closer to their death bed?

If you can get a higher wage, great, but if you’re getting a fair wage for your work, you really don’t have a complaint if your employer has a lucrative business model. You work for yourself–are you going to keep your prices low even though the demand is so high you can’t take a fraction of the jobs you’re offered? Why would you? If the price is fair for what you’re providing, well, it is OK to be on the high end of the range. It isn’t OK to gouge people, but it is OK to accept a higher wage when the demand for what you do is high rather than low. It is all a matter of proportion.
 
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St. Thomas has some interesting things to say about this in the Summa linked below–see article 1, where he addresses both buying something for less than it’s worth and also selling something for more, and article 4 which is specifically on trading as a means to profit (ie buying things and turning around selling them for more than was paid):

http://www.newadvent.org/summa/3077.htm
 
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I can hardly believe I am reading any of this. There is nothing per se immoral about making a profit. You buy something at a low price, and you find someone who is willing to pay a higher price. As long as you don’t engage in any other practices that are dishonest — failing to disclose hidden material flaws, or hiring home repair workers under exploitative conditions (underpaying them, taking advantage of illegal labor, giving them more work to do than they can get done) — all commercial business assumes that you are making a profit. It’s what makes our economy work, and to establish “just prices” and “just profits”, we would have to have a Catholic social order, guilds and so on, which we do not have. Unless someone is engaging in immoral price-gouging (e.g., charging $20/gallon for gasoline during a natural disaster), the market levels out in an equilibrium between the highest price that people are willing to pay for an item and the lowest price at which the seller can make a profit. It may seem mercenary or sinister, but nobody has ever found a better system that distributes goods justly. Profit is neither sinful nor unfair.

As far as the aunt’s car situation, it would be nice to tell your aunt that you need the money and that you have the opportunity to make some money by selling the car she gave you, will that be okay? You might offer to split the profit with her, but as far as whether that is obligatory under pain of sin, I incline towards thinking not. I don’t know your aunt.
 
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