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View Full Version : What the FLIP'S the matter with you?



RICHARD
03-16-2008, 03:39 PM
I love the house flipping shows. You know, the people who buy a house, improve it and sell it for profit.


Two things that do bother me.

The FLIPPING MATH/profit margin and the builder's imprint.

Why would you want to design a space with YOUR tastes? YOU AIN'T gonna live there? Is it the inner designer in you?

The second thing is the flipping math.....

A house is bought for 50,000 dollars.
You put 25,000 into improvements.
You sell for 100,000.

At the end of the shows, their math says you make 50,000 dollars.

Isn't the profit 25,000? The shows make it sound like there are jillions of dollars to be made....You put 25,000 into the renovation-you make that money back, right?

So your profit should be ONLY 25,000?

interesting!

Catty1
03-16-2008, 03:47 PM
Maybe the show pays the $25,000 as part of the deal?

Rachel
03-16-2008, 04:21 PM
I like these shows too but sometimes I question where they find trades people who work for such small prices. Doesn't happen in my neck of the woods. Another thing they never seem to factor in is the real estate commission - which easily = 6%. They never take that into consideration, nor the real estate taxes for which you will owe during the time you hold the property. There are some rather significant charges incurred when you sell property too taxes for *transfer* by city or county.

I think the days of turning a flip for big bucks may be few and far between considering the prices have been dropping significantly in some areas. A few shows which calculate how some of these flippers lost money when all the other costs are factored in surely are in order....or maybe those folks are too :o to allow their situation to be broadcast.

RICHARD
03-16-2008, 04:42 PM
The show does have some kind of deal with manufacturers....Usually there is some product placement, a visit to a store or supplier, or a freebie to the flippers -the companies get a mention at the end of the program...

The houses are sold to private buyers- There is one show where they 'do the math' correctly....they break down the costs -When the home goes on the market and does not sell immediately, they do a monthly account on the costs of carrying the house and how much it takes from the profit.

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I am also amazed at some of the 'problems' that people run into.

I watched a program where a couple flipped a home here in the San Fernando Valley.. As you move toward the west portion, house prices go up and so do the noses in the neighborhood.

The couple were in the process of picking a color for the outside of the home when a woman walking a dog stopped and began to talk to them.

There was no Homeowners Association in the area, but the woman told them that they "could not paint their house that color" -seems like her home was the same color and she had problems with it.

The Flipper's then picked another color. :confused: :confused: :confused:

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On another show a nosy neighbor called the cops/city because of the trash from the teardown.

Those are the jealous/nosey/stupid people who don't see a few weeks of trash on a lawn as months or years of improvement to the 'hood.

Like the across the street neighbor-If he don't like you and you are trying to do some work on the house, you will get a visit from the city-thanks to his dropped dime.

Cataholic
03-16-2008, 06:23 PM
I love the flipping shows. I haven't seen the ones where the math isn't done correctly (though, I am not math savvy, so, maybe I just don't catch on?). The one I watch is "Flip This House" with Kristen, the designer. She is a little not my stylish'ish, but, I like seeing what people do.

I am amazed at the people that have no experience, and no money, yet somehow think they can make a quick buck.

Medusa
03-17-2008, 07:12 PM
Yes, I watch those flip shows, too. I like them a lot. I also love Design to Sell. Like you, I'm amazed at how they get professional services so cheaply. I want to remodel my upstairs bathroom and the estimates are all over the place. I got one for $1000 - $1500 which is ridiculously cheap. I wonder about his work. I got another for $10,000 just in labor and that's ridiculously expensive. I'm currently waiting for the third estimate. Mine is not a luxury home; it's 50 years old and the bathrooms are small. I don't want to price myself out of the market should I decide to sell. I've gotten a lot of good ideas from those shows on HGTV. I was able to remodel my downstairs bathroom relatively inexpensively from ideas that I got from HGTV.

mruffruff
03-18-2008, 12:01 PM
I watch them all and haven't seen any where the math is wrong. I do wonder about the actual cost of remodeling, though. I understand that the labor can be less than what we would pay. Some of it is done by the remodeler and some by a subcontractor who will cut his costs in the hope of more work later. I also realize that flippers and designers get deep discounts at suppliers. But sometimes the amount put into a house seems pretty small for what they end up with.

I'd love to flip a house. But with my luck, the electrical system would need to be totally replaced, the plumbing would not pass inspection and the floors would be rotted beyond repair. And the roof would mysteriously leak and need to be replaced the day before Open House!

It's a risky business. Not one I can afford to get into. But fun to watch.