FLIP THIS HOUSE TV show

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Submitted by HLS on August 5, 2007 - 10:57am

and others like Property Ladder, are extremely popular shows...

I saw one recently where the guy bought a house for $350K, His budget was about $25K. He ended up spending $50K. I think that he spent at least 3 months doing it.
He's now in the house for $400K. He quit his job to do it.
A full service real estate agent tells him at the end that it's "worth" $445K. He's happy.
The show ends saying the profit will be $45K, not bad for 3 months work...

OK,, so IF the guy gets $445K, his net after RE commission will be $418K. He's probably going to have to pay buyers title insurance or have other costs. I'll be generous and say he's down to $416K.

Even if the guy bought the home for $350K with 100% financing and a "no cost" loan, his interest and taxes have to be about $8,000 for the 3 months.

Now he's down to $408K. If my math is good, he will make $8,000 taxed as ordinary income for 3 months work. Unless he made less than $32K at his job, he was better of staying at work, and he probably spent more hours working on the house.

If he paid the $50K in repairs out of pocket, he's lost interest income on the money. If he used credit cards to fund his adventure, he can't pay it off until the house sells.

IF he doesn't sell the house quickly, his carrying costs continue at about $2700 a month AND he has no job to go back to.

If it all goes smooth,
My question is, did he actually NET more than $2 an hour ?

‹ 1,460,000 ARM defaults expected Heard in the checkout line ›

HLS, you are fogetting the
Submitted by barnaby33 on August 5, 2007 - 1:49pm.

HLS, you are fogetting the pride that sweat equity brings, thats gotta be worth something. 2 bux an hour sounds about right!

Josh

And therein lies the
Submitted by ph90802 on August 5, 2007 - 2:51pm.

And therein lies the problem. Most people who consider themselves "real estate geniuses" aren't bright enough to do the math. They watch TV shows like this one and think that they can make a relative fortune in just three short months. Anyone who doesn't do it is a fool/loser/idiot/etc because real estate always goes up, right?

Who's the fool/loser/idiot now?

My wife and I just recently
Submitted by Drew on August 5, 2007 - 3:11pm.

My wife and I just recently started watching the "Flip This House" shows again this weekend out of morbid curiosity. Its really is amazing how obviously f-ed some of these people are once they finish their project. The last episode we caught was a woman in LA that bought a home for $510k and had a 10 week time frame to flip it (cant recall her budget). At the end of the episode, she had spent 1 year on the flip and $205k (remodeling, holding, etc.), totaling $715k, lol. She sold her home and moved into the flip house.

About 2 years before selling our previous home of 6 years, we spent about a year remodeling the entire house for a great price and a lot of our own sweat. So when we watch these shows, its great watching the train wreck of expectations between when they start and finish.

There's another thing that I
Submitted by HLS on August 5, 2007 - 3:30pm.

There's another thing that I want to know.. Does the TV show pay these people ? (On a show like WIFE SWAP each family gets $50K) Is it just ego to say that my flip was on TV ? Why else let them intrude on your life ?

Do most/all flips they show get completed ?
Ya gotta know that a certain % of people that they start filming have to be complete wackos, way out of their league and get totally overwhelmed instantly or somwhere along the line realize that they are in way over their head for whatever reason.

They never show those people, do they? I really don't watch it often, but know it is a popular show. I wonder what % of "flips" they film actually make it to be shown.

I'm sure there have been fights and divorces over this stuff, and someone who appears totally screwed, like $80K over budget, maxed out on credit cards, near broke and stressed out doesn't make for good TV from their perspective. I'd actually like to see the truth!

I suggest a show co-hosted by Jerry Springer AND Dr. Phil and call it "COULDN'T Flip this House" It would be my favorite show, my TIVO is ready. Guests could be the people whose homes are shown on MTV CRIBS, with their opinions.

(Several other morbid curiousities of mine are where are the stock day traders that went from miilions to minimum wage job AND what exactly happens to a passenger that misses a cruise ship in port with no passport or toothbrush on them. What does it cost them to catch up with their ship ??)

Don't forget though, he got
Submitted by cr on August 5, 2007 - 4:11pm.

Don't forget though, he got to be on TV!!!

These shows are just starting to feel the effects of the bust. Most will be gone in a year.

These shows are just
Submitted by no_such_reality on August 5, 2007 - 7:44pm.

These shows are just starting to feel the effects of the bust. Most will be gone in a year.

Actually they won't, but maybe people will get a clue to what real flipping/rehab is. Basically, many of the shows are going back to following Pros. Teams of people, short times, basic repairs, nothing grandieose.

The one I saw last night as in New Haven, they bought for like $160K, put $30K in over three weeks (new windows, appliances, bath, asphalt drive, landscaping, paint, strip and seal wood floors, tile laminate [cool looking stuff btw, think Pergo but tile], paint throughout etc. 2.5% realtor coop and potentially out.

But basically, all that, for $25-30K profit, for six people, one a Realtor working this and other properties.

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