The LA Times has this tale of a group of flippers. "A group of friends who set out to buy, fix up and 'flip' a Palm Springs tract house haven't found the riches they were seeking. But the four Newport Beach residents, all experienced remodelers, learned some lessons about themselves, about working with others and about real estate investing."

"In August, the four bought a three-bedroom, two-bathroom, 1,900-square-foot home that seemed like a good-enough deal at $425,000. Houses in Palm Springs had been appreciating consistently, and other homes on the same street were listed for considerably more."

"For the purchase and all subsequent expenses, the costs were divided equally. All four names went onto the 5.5% 30-year adjustable-rate mortgage. For the deposit, each contributed $2,500. And at the end of escrow, each wired their share: $10,500. The plan was to spend $60,000 fixing up the house, then sell it in two months for about $650,000. According to Ron Haughey's calculations, the profit would be $60,000 after all expenses, taxes and commissions, or $15,000 for each partner."

"Spirits were high when the project began. The friends worked full time during the week and then spent weekends in Palm Springs on their project. After the house was finished in late October, it was listed. Until the talk turned to setting the sales price, there had been no major disagreements on financial issues. But at this point, the partners disagreed."

"Eventually, they compromised on $695,000 and had dreams of pocketing about $22,000 each. The house went on the market in early November. They held open houses each weekend. In early January, the group agreed to lower the price to $669,000. When the house still did not sell, the foursome decided to stage it, and to sign up with a major real estate company in the area."

"Their new agents, Brian and Diane Walker, suggested lowering the asking price to $649,000, and the foursome agreed. The monthly carrying cost was $2,800, or $700 each. According to Brian Walker, the market had 'softened'a lot between the time the house was purchased in August and it was listed with him in late January."

"The house is now listed for $629,000, and if it sells for that, each partner will pocket just $5,000. 'It's not risk-free,' Nina Smith said of her first foray into speculative remodeling. 'I need to better educate myself on finding a better property.'"

"And if the house doesn't sell for the current price? 'We have all discussed Plan B,' Jeanine Scalero said. 'The possibility of turning it into a vacation rental. We've been told that weekly rentals go for around $1,500.'"