N/A Flip This House

mikea

mikea

Touchdown! Greaser!
Gone West
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Lake County, IL
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iWin
I've surrendered. I've been unable to resist stopping by while channel cruising to view the train wreck that is "Flip This House" on A&E. What grabs me is how these idiots seem to pull off these profits. I MEAN idiots.

In one show, the wife was convinced they bought only half of the property until the hubby showed her the platt.

Then he had to enjoy hopping on the rented bulldozer to knock down a add-on to the outbuilding. He backed up the dozer wide three times, swinging the dozer into into the porch and structure until at the end they decided the building was left beyond repair and had to come down entirely.

The latest one had him buying a house at midnight without going inside. The house was roach-infested and had a bathroom with a torrential water leak that filled up to the floorboards. His plan was to "lipstick" it until his brother decided it might be better to have actual floor beams underneath. Then the city shut them down for not having permits....

In the meantime they show him driving his Hummer and they just bought a $1.6 million office building.

I know that the producers may have a huge hand in editing and manipulating the footage so to make them look like idiots to hook you in, but still it's no wonder everybody thinks flipping is easy and profitable. It's like a three card monte game. If these idiots can do it, I certainly can.

I gonna start looking at nearby foreclosures. :D (Not really. I can't even keep up with the one house.)

What I don't get so far is why the flippers have this critical schedule. Is that because they get a short term construction loan?

(BTW, this is "Flip This House." not "Flip That House," which is pretty much idiot-free.)
 
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It depends on how they financed the house.

If they went through "hard money lending", which is basically a 90 to 180 day loan with huge increases in interest as repayment time increases, then they would need to sell within the shorter time frame.

Most flippers have the mentality, which is quasi-ok, that the less I spend out of pocket, and the quicker I get it back on the market, the higher my profit. This isn't always the case, but, at the end of the day, most of these people make money because there is an equal supply of idiots willing to purchase a "value added" product.

Cheers,

-Andrew
who has way too many friends who think they are 'Real Estate Professionals' because they have flipped a few homes
 
Can anyone tell me the new name/channel of the flip program featuring Trademark Properties in South Carolina? I think the name changed to something like "real estate pros". :dunno:

Update: disregard. I found it on Google. The name is "the real estate pros" and it's on TLC.
 
kevin47881 said:
Can anyone tell me the new name/channel of the flip program featuring Trademark Properties in South Carolina? I think the name changed to something like "real estate pros". :dunno:
Click to expand...

Just read it in the "Flip This House" board. On TLC. The Real Deal.

Somebody stop me. I just spotted a "lender owned" "rehabber special" just around the corner. Gonna go look at it.

How does financing work on an investment property when you're not going to live there? Is it still 20% down required?
 
"Flip This House" is almost as responsible for the current housing mess as sub-prime mortgages - well not really but I exagerate only slightly!

The first defaulters were repricing 'option' ARM holder's, followed very quickly by amateur flippers. We have several barbers, doctors' wives, small general contractors, etc, currently in foreclosure. People forget that when the updrafts are strong, even the turkeys can fly with the eagles, or, in other words, a rising tide floats all boats. When the updrafts stop, and turn into downdrafts, only the very strong, professional managers can keep things afloat. Just being big doesn't help much either - look at Neuman Homes.

I would look at the date that particular episode was taped - betcha it wasn't in the last 12 months.:no:
 
mikea said:
How does financing work on an investment property when you're not going to live there? Is it still 20% down required?
Click to expand...

If the bank is smart they will want higher % down than that. Financing a spec in this market requires either significant staying power (read total debt carrying capacity including property taxes, utilities, etc on two properties) or substantial equity that can be eroded away by carrying costs.
 
astanley said:
It depends on how they financed the house.

If they went through "hard money lending", which is basically a 90 to 180 day loan with huge increases in interest as repayment time increases, then they would need to sell within the shorter time frame.

Most flippers have the mentality, which is quasi-ok, that the less I spend out of pocket, and the quicker I get it back on the market, the higher my profit. This isn't always the case, but, at the end of the day, most of these people make money because there is an equal supply of idiots willing to purchase a "value added" product.

Cheers,

-Andrew
who has way too many friends who think they are 'Real Estate Professionals' because they have flipped a few homes
Click to expand...

What I'd like to see them include on the show are the followups with the phone calls and lawsuits they get from the house buyers. The "roach house," among the ton of other problems, had mold. They glided right over it with a Ho hum. :hairraise: They did replace the drywall, but with none of the near-hazmat precautions I've seen on "Holmes on Holmes."

I have the feeling (hope) that we can predict a future story about these guys getting sued or disappearing. There are posts there from contractors who got burned for $10,000 from these guys.
 
bstratt said:
"Flip This House" is almost as responsible for the current housing mess as sub-prime mortgages - well not really but I exagerate only slightly!

The first defaulters were repricing 'option' ARM holder's, followed very quickly by amateur flippers. We have several barbers, doctors' wives, small general contractors, etc, currently in foreclosure. People forget that when the updrafts are strong, even the turkeys can fly with the eagles, or, in other words, a rising tide floats all boats. When the updrafts stop, and turn into downdrafts, only the very strong, professional managers can keep things afloat. Just being big doesn't help much either - look at Neuman Homes.

I would look at the date that particular episode was taped - betcha it wasn't in the last 12 months.:no:
Click to expand...

Around here for a while, you could do 100% financing interest only on a 24 month ARM on anything (credit rating?? Who needs a credit rating, you have a pulse, you getta loan)... no money down... buy the house, sit on it for a month or so, and put it on the market after having spent $0 on upgrades and make a tidy profit. The house would sell within hours of being on the market. If one went 24 hours without a contract, it was considered a slow seller. Real estate agents had standing order from buyers to offer any amount on houses below 200K as soon as they hit the market. It was freaking insane... A couple I know were moving back to Iowa. They put their house on the market at midnight, by 0800, they had a contract for 25 thousand more than their asking price.

I know several people that started dabbling... a few even quit their jobs and started "flipping full time"... it was easy money... easy come, easy go... :D

"Flip this House" is fantastic entertainment... Who needs permits?? :D
 
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Several years ago a friend and I tried to buy a fixer upper to flip. The trouble is it's very difficult to buy a house cheap enough to fix it, flip it, and make money. There were so many people with the same idea that it drove to price way up. It was unbelievable what these houses were selling for.
 
bstratt said:
If the bank is smart they will want higher % down than that. Financing a spec in this market requires either significant staying power (read total debt carrying capacity including property taxes, utilities, etc on two properties) or substantial equity that can be eroded away by carrying costs.
Click to expand...

Gotcha. Oh yeah, insurance and taxes. A large portion of my payment goes for that.

There goes my dream. Thanks a lot, killjoy. :D

I think all of that should serve to really push down the prices..but it wouldn't' just be me figuring out the value.

I thought the one thing that I think I lucked on buying my home last year at this time was buying during the holidays when most are distracted are cash poor...or something. I think if I hadn't made the offer as fast someone would have beat me to it. My current neighbors claim they were a few days away from masking an offer. It's even more scary since it took me a week or two to get my agent to arrange to show me the house.
 
All these idiot real estate shows are like the airplane magazines - real estate porn. Do that many people really have twenty grand to blow on a new kitchen, just so they can sell the house for nineteen grand more?

On the other hand, what about people who restore airplanes, putting in a twenty grand avionics suite so they can sell it for ten grand more?
 
JohnR said:
On the other hand, what about people who restore airplanes, putting in a twenty grand avionics suite so they can sell it for ten grand more?
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HUSH!!! They'll HEAR you - don't discourage 'em, for cryin' out loud!! :eek:


:)
 
mikea said:
Gotcha. Oh yeah, insurance and taxes. A large portion of my payment goes for that.

There goes my dream. Thanks a lot, killjoy. :D
Click to expand...

You're welcome!!!:D

A "good" banker is also a financial advisor. A "bad" banker is a salesman only!
 
Sleek-Jet said:
Around here for a while, you could do 100% financing interest only on a 24 month ARM on anything (credit rating?? Who needs a credit rating, you have a pulse, you getta loan)... no money down... buy the house, sit on it for a month or so, and put it on the market after having spent $0 on upgrades and make a tidy profit. The house would sell within hours of being on the market. If one went 24 hours without a contract, it was considered a slow seller. Real estate agents had standing order from buyers to offer any amount on houses below 200K as soon as they hit the market. It was freaking insane... A couple I know were moving back to Iowa. They put their house on the market at midnight, by 0800, they had a contract for 25 thousand more than their asking price.

I know several people that started dabbling... a few even quit their jobs and started "flipping full time"... it was easy money... easy come, easy go... :D

"Flip this House" is fantastic entertainment... Who needs permits?? :D
Click to expand...

ARM's aren't necessarily bad - I took a 10 yr ARM. It was the "option" ARM's that were really bad.

Option ARM's allowed you to capitalize a portion of your interest payment each month. So you were paying less than the full interest payment and increasing principal each month. As you were making the "required" payments, the banks were allowed to take the total interest into income each month, e.g. total interest due $1,000 - you paid $500, your principal went up $500 - Bank declared $1,000 income. 3-4 months before the mortgage reset the bank bundled the mortgage and sold it to a sucker investor. Caveat Emptor!
 
mikea said:
What I'd like to see them include on the show are the followups with the phone calls and lawsuits they get from the house buyers. The "roach house," among the ton of other problems, had mold. They glided right over it with a Ho hum. :hairraise: They did replace the drywall, but with none of the near-hazmat precautions I've seen on "Holmes on Holmes."

I have the feeling (hope) that we can predict a future story about these guys getting sued or disappearing. There are posts there from contractors who got burned for $10,000 from these guys.
Click to expand...

Once again I was wise beyond even what I think. Look at the guy's site. See any link for homes for sale? Wonder why? But, oh! You can buy a seminar or book or sumthin to learn his secrets. The last refuge of a ...

With Barry's (and others) take, the days that anybody will buy on the spot because it can only go up are gone. Those shows are from last year. Not no more.

And it dawned on me that the deadline is because every month you pay interest, insurance, taxes, utilities, etc is a dip into your profits. Doh!
 
Flip That House, Flip This House, Property Ladder, etc ...

I only watch because Kirsten Kemp is certifiably HOT! :)

But my wife watches it, too ...
 
gkainz said:
Flip That House, Flip This House, Property Ladder, etc ...

I only watch because Kirsten Kemp is certifiably HOT! :)

But my wife watches it, too ...
Click to expand...

Word... :yes:

Ginger on Real Estate Pros isn't bad either... plus she's got that South Carolina accent... :D
 
gkainz said:
Flip That House, Flip This House, Property Ladder, etc ...

I only watch because Kirsten Kemp is certifiably HOT! :)

But my wife watches it, too ...
Click to expand...

What show has this Kirsten of which you speak? :D

I had a thing for Paige Davis. I guessed she was off the show but didn't know why!
:hairraise:
 
Question: When you look at the property from the outside and there's a box of rat poison on the windowsill on the back porch is that bad? :p
 
mikea said:
What I'd like to see them include on the show are the followups with the phone calls and lawsuits they get from the house buyers. The "roach house," among the ton of other problems, had mold. They glided right over it with a Ho hum. :hairraise: They did replace the drywall, but with none of the near-hazmat precautions I've seen on "Holmes on Holmes."

I have the feeling (hope) that we can predict a future story about these guys getting sued or disappearing. There are posts there from contractors who got burned for $10,000 from these guys.
Click to expand...

mikea said:
Once again I was wise beyond even what I think. Look at the guy's site. See any link for homes for sale? Wonder why? But, oh! You can buy a seminar or book or sumthin to learn his secrets. The last refuge of a ...

With Barry's (and others) take, the days that anybody will buy on the spot because it can only go up are gone. Those shows are from last year. Not no more.
Click to expand...

More psychic ability.

It turns out:

  • He is facing foreclosure on 20 or more of his properties.
  • Anything he owns now is in his wife's name because his credit is shot due to the multiple foreclosures.
  • He never owned that commercial building. He only rented the office there (Big surprise! That "Plaza" deal was so phony I laughed.
  • When you check the property records of their flips. They paid more, sold for less and often never sold at all.
  • He touts a DVD course for $97 and sends CDs if he sends anything.
  • The course is all about why you should buy the $997 course.
  • He's on the radio with ads for the course as "A Real Estate Guru."
  • The Hummer was leased. It's gone. He's still driving a (leased) Mercedes.
  • He claimed (claims) to have flipped 1000 houses, or 30 a month, or one a day...when on the show each takes 2 months.
  • His own brother/partner split and is being sued separately.
  • The brother said on his site that he would reveal secrets but hasn't been heard from since June.
http://www.flipthislawsuit.com

It looked to me like the "buyer" who signed on the spot for "the roach house" was staged. When she comes out and tells him they sold they have a very hard time acting surprised.

The report is even stuff likr the "accidentally" knocking down the garage was a stunt.

In the meantime A&E pulled the shows with the Atlanta guy who was found to be a complete fraudster and didn't even own the houses. These shows are still on with nary a peep. I guess as long as they get ratings...:mad:
 
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