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Two weeks ago
Mar 11, 2019

Flip a house, make a bet: Real estate vs. betting

What is house flipping?

How does house flipping relate to betting?

Irrational behaviour

An open market is an open market

Flip a house, make a bet: Real estate vs. betting

Millions of people around the world earn their living with real estate. If you are not one of them, odds are you have watched a television show about professionals that do. The concept of earning money “flipping” a house is widely understood by many, but can the mindset apply to sports betting? Read on to find out.

What is house flipping?

Flipping a house refers to purchasing a piece of real estate at a low value, doing renovations or repairs and then earning a profit by selling it back on the market for a higher value. Professionals that flip houses look for real estate that fits a certain profile in a specific market condition before purchasing.

Market price, upside of repairs, estimated price and return on investment are some of the many factors taken into account when flipping a home.

How does house flipping relate to betting?

House flipping and sports betting share many parallels. For example, most professional sports bettors look for teams that fit criteria in a market where they are underpriced. Pricing models that account for matchups within the game generate estimated probabilities and return on investment is determines the edge.

Professionals that flip homes assess upside and downside by looking at things like neighbourhood location or foundation repairs while bettors look at matchup styles and injuries. Everything comes down to price of entry and risk for return.

Irrational behaviour

Many bettors understand the principles of flipping homes and buying real estate, but few are able to apply the same logic to sports betting despite the similar mindset required. One of the most popular ways of betting is to fade the public, which is a method of betting on teams that receive a smaller percentage of total bets at a sportsbook.

The equivalent of doing so with flipping houses would be surveying strangers and asking if they would purchase a home on a yes or no basis – then blindly doing the opposite of the more popular result.

Despite both transactions sharing the same basic principles, fading the public is considered sharp and wise by many foolish bettors yet the house flipping equivalent would be considered insane by all.

Buy low spots

One of the most popular ways to flip a home is to buy undervalued properties in up and coming neighbourhoods. The idea is that the market undervalues the home based on the history of the surroundings so much that the property becomes extremely cheap, and the return can be high when the surroundings improve.

The equivalent in sports betting is betting on teams playing multiple games below their average at a discounted price against teams playing multiple games above their average. Millions of people make a living purchasing buy low homes in real estate, but in sports betting, the idea of buying low is often disregarded. Many bettors mistakenly believe value is only determined by the result.

An open market is an open market

The same principles apply in any open market. It does not matter if it is buying and selling real estate, shoes, electronics, cars or teams in a betting market.

The goal is always to make an investment at a price that is better than what the rest of the market is willing to pay. If bettors can focus on getting a price better than market value – especially at Pinnacle Sports – they will always be a winner long term.

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