Reality is rarely as easy as reality television makes it seem. While popular TV shows make real estate investing – specifically, flipping houses – seem easy, following a cooker cutter approach to investing rarely works. As you watch flippers makes tens of thousands of dollars on property after property, there are several elements of the investment project that are never mentioned in the 30-minute program. From the investor’s experience and help to the lengthy timeline and omitted fees, this is how real life real estate investing differs from what you see on television.
Experience
The house flippers and designers on popular HGTV shows make completely changing and selling a home look easy, which is a large part of the appeal of the show. What you don’t see on camera is that many of these investors have spent years studying and purchasing properties (and not always making the best deal). The El Moussas from HGTV’s show Flip or Flop have been open about their struggles in real estate prior to becoming famous. In 2008, when the real estate market took a dive, the couple was forced to move from their family home into a small apartment with a roommate, sell their vehicles, and barely had cash to eat. While the stars may make the flip look easy, they’ve seen their share of sweat, bad deals, and real estate market lows.
Not A 2-Man Crew
Isn’t it amazing what two partners can do in just a couple months when completely renovating a home? It almost seems impossible, and that’s because it is. Don’t leave your couch with the idea that you and an investment partner can make a quick $50,000 by flipping an entire home in two months. The reality TV shows feature the hosts, but what you won’t see are the subcontractors that work diligently at each project. Crews of people – contractors, designers, landscapers – they’re all handling the demolition, rebuild, and final touches. The hosts may be the ones who hand the keys to the new owners, but they certainly weren’t the ones to rebuild the home.
No Overnight Renovation
We would love to tell you that what you see in a 30- or 60-minute show takes only a couple of weeks to accomplish, but it isn’t true. One of the most common investing mistakes is failing to understand that time commitment involved in flipping a property. It takes an experienced investor and house flipper roughly 90 days to complete a project. If you’re just beginning, or planning to expand your portfolio with flipped properties, you can expect the project to take longer.
“Profit” Can Be Misleading
The lure of an $80,000 profit by flipping a home is tempting. But real estate investors who have been in the industry for a while know that the “profit” shown on the popular television shows isn’t actually what the investor takes home. The shows rarely mention expenses associated with real estate deals, like fees, holding costs, commissions, closing costs and other expenditures.
While there is certainly money to be made in flipping homes and other real estate deals, common investment mistakes simply don’t make for good television. Skip the glamour of a 30-minute show and study your local real estate market. Team up with a strong real estate agent and other experts in your area to understand the reality of real estate.
The house flippers and designers on popular HGTV shows make completely changing and selling a home look easy, which is a large part of the appeal of the show. What you don’t see on camera is that many of these investors have spent years studying and purchasing properties (and not always making the best deal). The El Moussas from HGTV’s show Flip or Flop have been open about their struggles in real estate prior to becoming famous. In 2008, when the real estate market took a dive, the couple was forced to move from their family home into a small apartment with a roommate, sell their vehicles, and barely had cash to eat. While the stars may make the flip look easy, they’ve seen their share of sweat, bad deals, and real estate market lows.
Isn’t it amazing what two partners can do in just a couple months when completely renovating a home? It almost seems impossible, and that’s because it is. Don’t leave your couch with the idea that you and an investment partner can make a quick $50,000 by flipping an entire home in two months. The reality TV shows feature the hosts, but what you won’t see are the subcontractors that work diligently at each project. Crews of people – contractors, designers, landscapers – they’re all handling the demolition, rebuild, and final touches. The hosts may be the ones who hand the keys to the new owners, but they certainly weren’t the ones to rebuild the home.
We would love to tell you that what you see in a 30- or 60-minute show takes only a couple of weeks to accomplish, but it isn’t true. One of the most common investing mistakes is failing to understand that time commitment involved in flipping a property. It takes an experienced investor and house flipper roughly 90 days to complete a project. If you’re just beginning, or planning to expand your portfolio with flipped properties, you can expect the project to take longer.
The lure of an $80,000 profit by flipping a home is tempting. But real estate investors who have been in the industry for a while know that the “profit” shown on the popular television shows isn’t actually what the investor takes home. The shows rarely mention expenses associated with real estate deals, like fees, holding costs, commissions, closing costs and other expenditures.
While there is certainly money to be made in flipping homes and other real estate deals, common investment mistakes simply don’t make for good television. Skip the glamour of a 30-minute show and study your local real estate market. Team up with a strong real estate agent and other experts in your area to understand the reality of real estate.
