Flip This House

[blgstocks]

Have any of you seen "Flip this House" or "Property Ladder" on TLC?
I just saw quite a few episodes last night and I think it is a great show and takes a necessary, although shallow, behind the scenes look at flipping a property.


I have some gripes with it though. Both these shows are so overly simplistic on the money. For a 3bd 1 bth in the Hills of LA these women bought a house for 840,000. But they do not count in closing cost on a purchase this size depending on the loan they got, I would conservatively say it cost them an extra 15k in closing costs.
They do everything right with the fix up and they list it at 990,000. And there budget was 50k in expenses to remodel. So the shows calculator says that they made 100k profit for 6 weeks of work!!! WOW i want to be a property flipper too. Hey honey grab the kids we are moving to california.

But wait, is the realtor listing it for free? I geuss so because in the real world at a conservative 5% commision (for this area i would safely say it would be 6%) would cost 50,000. Plus another conservative 5,000 in closing costs. So by my conservative "real world" calculator they stand to make 30k in profit. Still a very nice profit. But they do not include the mortgage payment, and unless they bought this straight cash(not many have 840k in savings) the mortgage payment would be a very conservative 5,000 a month and thats assuming about 35% down, which it was more likely 20% or less down. So it took them 7 weeks to get it on the market so thats another 10k in mortgage payments. And since I am a realtor in southern california, I have access to the mls that this property is listed at, the avg property is staying on the market for 45 days. So assuming this is avg, it will stay on market for another 5k mortgage payment.
Total profit 15K, and that is a very generous 15k because that was assuming everything was best case scenario, which anyone who is around fixers will tell you to expect the worse and then double it. I think it is practically lying to say they have a 100k profit for their work and yet in reality it is likely 15k and that is assuming they get a full price offer in a pretty short period of time.

Sorry to ramble on, but these shows could end up hurting many people interested in flipping property and see these shows and dive right in without fully understanding the risk to reward. 15k for taking on a 975k investment in a slowing market is very high risk, pretty low reward.

The show property ladder is a lil bit better when it comes to the cost of doing one of these. But it is still very decieving.

Anyways, I was just curious if any of you guys have seen these shows or have any experience in flipping property?

 

[Franky Wright]

BLG,
I have watched these and done "flipping" personally, and find these shows somewhat amusing. They make it seem so easy as you say, and your anaylsis is right on. Also try being the GC of one of these, and see how many subs show up on time, and/or even show up. Kerching, the interest is ticking :scared

But everything is sensationalized these days, so whats so different about this I guess :shrug: :sadwave:

They are entertaining for me though, as I like to rip them apart like you did :142smilie

Franky

 

[blgstocks]

Good stuff Franky,

I just watched another episode(got alot tivo'd) and it was a team of investors looking to flip a house in a neighborhood I am pretty familair with, and they say they bought the house at 348k (if i remember correctly) and rarely do homes come on the market priced this below value. This leads me to raise an eyebrow as to the accuracy of the price they are starting with. Anyways they put in 10k into and the realtor said they could sell it for 50k more which i doubt and judging the way i usually do they would probably break even. But what was unique about them was they bought a property zoned to be upgraded for a duplex.
Now the numbers that were thrown out to build the duplex sounded about right and the price a duplex would go I thought they actually underestimated. So it was interesting to see that one could actually still make a profit( and not just a fairy tale best case scenario profit). Since i have talked with a client extensively on his building up a similair zoned lot and put a duplex in the back of his house, the only thing I can knock is the time it takes to get the plans approved by the city is probably 6 months to a year alone. This guy was saying that this project would take 3-6months. oops, try bumping that by about a year. This is where your point about the sub-contractors comes into play big time!

I was also wondering if you caught the one with the kid who bought a house and his parents cosigned the loan, and he had no money to make improvements. Oh man, this kid was the most unprepared worst case scenario ever. But surprisingly, he had a profit of 30k (yeah right) when it was all said and done. If you havent seen it is is a "property ladder" episode, and i promise you will laugh your head off or just shake your head in disbelief, probably both.

 

[SixFive]

I've seen the flip one a few times (the one with the 2 brothers). What struck me was the coordination between all of the subcontractors, even when rain was involved several days. Hard to believe. They also sold this house at a 1 time open house where about 40 people showed up to see it. :shrug: How do you recruit that many people to an open house that aren't just there for the free food (real, prospective buyers)? :shrug:

 

[freelancc]

Oh man, this kid was the most unprepared worst case scenario ever.

i liked the use of cans of copper spray paint on the laundry sink and light fixtures. :nono:

would not be surprised if there are lawsuits pending on that one.. :sadwave:

 

[blgstocks]

i liked the use of cans of copper spray paint on the laundry sink and light fixtures. :nono:

would not be surprised if there are lawsuits pending on that one.. :sadwave:

HAHAHAHA :mj07: :mj07: :mj07:
How funny was that!

I like his game plan going in too, "well, lofts are trendy in LA so im going to take this roof off and add one here"

or his cheap, tacky, granite job on the counters. Before even watching it i was like dont put dark granite in the kitchen of a light california bunglaow home. And sure enough he exceeds my expectations of putting granite tiles on himself!

 

[Mjolnir]

I've seen the flip one a few times (the one with the 2 brothers). What struck me was the coordination between all of the subcontractors, even when rain was involved several days. Hard to believe. They also sold this house at a 1 time open house where about 40 people showed up to see it. :shrug: How do you recruit that many people to an open house that aren't just there for the free food (real, prospective buyers)? :shrug:

when you find out tell me, several times i've done an open house for one of my listings and only a few people show up. most of the time i get a healthy number but sometimes, it blows.

 

[SixFive]

when you find out tell me, several times i've done an open house for one of my listings and only a few people show up. most of the time i get a healthy number but sometimes, it blows.

I have a good friend who is a realtor, and he says they are almost exclusively a waste of time. The client wants them, so the agent does them. He told me his numbers and if I remember right, 3% of houses sold come from open houses. He has gained future clients who have attended open houses and thus gained business in this way.

 

[blgstocks]

yeah, i do alot of open houses actually, not to sell the listing, but to build a clinet base. Because basically they are one of the first places people start the home buying process.

But i rarely have more than 5 or 10 come through one
I would imagine the show does alot of signage throughout the area to direct traffic

 

[blgstocks]

Alright, I just caught the "Property Ladder" episode, which is real similar to the flip this house.

It is the episode where the politically correct married couple decide to "show everyone that they can make a profit and save the environment too"
Well, if anyone has seen the episode im talkin about please chime in, if not watch it for nothing else than the wife who is definitely a MILF. But the reason why I write about it is because this couple's mistakes had me laughin.

Of course they did the typical greedy list it themselves approach that kept them on the market for many months

Then they hired a family member to do all the work on the house and he screwed just about everything he could up

And their whole goal for the house was to make it environmentally freindly, and they did almost nothing to do that. They used a light paint(they said this was environmentally freindly),
they installed bamboo floors whichthey say is a reuseable wood, but ALL wood used by major suppliers of floors and cabinents are all grown specifically for that. Besides, I have seen Bamboo in alot of homes, its just a clean, inexpensive, strong wood.
Oh and they installed energystar appliances that use less energy. Most new appliances(if not all) that I have seen are energystar!
They wanted to use a recycled material tile but they said it was 2 and 3times as expensive as not recycled tiles, and they wanted to install solar panels but they would take too long and cost too much.
I geuss they really showed us that you can make a profit while saving the environment!

I think a found my new favorite show

 

[SixFive]

Alright, I just caught the "Property Ladder" episode, which is real similar to the flip this house.

It is the episode where the politically correct married couple decide to "show everyone that they can make a profit and save the environment too"
Well, if anyone has seen the episode im talkin about please chime in, if not watch it for nothing else than the wife who is definitely a MILF. But the reason why I write about it is because this couple's mistakes had me laughin.

Of course they did the typical greedy list it themselves approach that kept them on the market for many months

Then they hired a family member to do all the work on the house and he screwed just about everything he could up

And their whole goal for the house was to make it environmentally freindly, and they did almost nothing to do that. They used a light paint(they said this was environmentally freindly),
they installed bamboo floors whichthey say is a reuseable wood, but ALL wood used by major suppliers of floors and cabinents are all grown specifically for that. Besides, I have seen Bamboo in alot of homes, its just a clean, inexpensive, strong wood.
Oh and they installed energystar appliances that use less energy. Most new appliances(if not all) that I have seen are energystar!
They wanted to use a recycled material tile but they said it was 2 and 3times as expensive as not recycled tiles, and they wanted to install solar panels but they would take too long and cost too much.
I geuss they really showed us that you can make a profit while saving the environment!

I think a found my new favorite show

sounds about like me watching some show like ER and picking out all the medical innaccuracies. I guess when you've been there and done it and then it's portrayed incorrectly or errantly on a tv show, mistakes are just glaring.

 

[Mjolnir]

yeah, i do alot of open houses actually, not to sell the listing, but to build a clinet base. Because basically they are one of the first places people start the home buying process.

But i rarely have more than 5 or 10 come through one
I would imagine the show does alot of signage throughout the area to direct traffic

where are you a realtor in so cal? I work mostly i L.A., san bernardino and riverside county.

by the way i saw the new episode of flip this house on sunday night. they've got this family in San Antonio, now. these guys are going to make it tough to watch this season. i thought the Davis' were tough to see once in a while, these new guys freakin blow. The brother who runs the show is so arrogant i want to turn it off everytime he's on.

 

[blgstocks]

I work in Long Beach and surrounding areas right now, have worked a little in LA and Hollywood, and I use to work in the High Desert.

 

[SixFive]

I watched several of these over the weekend. Saw the idiot kid who spray painted his sinks copper among other things. He was lucky to get out of that even.

I also saw one where this stupid couple was trying to do a "green home". LOL, what idiots!! There house was on the market for over 4 months, and they ended up not doing the solar panels, etc. The guy also hired his brother who ripped him off by charging him by the day, lol! Duh!!