Over the past several years we have seen Reality TV shows about every type of real estate imaginable.
We’ve seen shows on how to buy, fix and flip a house,
Shows on how to sell your house quickly,
Shows on how to decorate your house,
Shows on how to pick the right house to buy,
And the list goes on and on.
How many of these shows are based on reality?
I have watched many of them. And, I really don’t get it!
For instance, we always remind sellers to neutralize their homes before placing them on the market to sell. Yet, many of these shows are painting homes bright, bold colors. And, the homes are selling the first day for sale.
The flipping houses catch my interest the most. Buyers purchase the shell of a house, work on it for 6 to 8 months, put top of the line everything in it and put it back on the market. Okay, some of the owners encountered a few bumps in the road. But, at the end of the show they give you a summary of the buyer’s total profit. These people were netting $50,000, $100,000 and more than $100,000!
Did these shows give the illusion that real estate investing was easy?
Did they make people think that selling your home is easy?
That decorating your home is easy?
Well, sorry, I’m just not biting! I know that there are smart savvy investors that know what they’re doing when it comes to flipping houses. They go into a house with a crew of men, knock a property out in a month, and make a quick sale by accepting a comfortable profit. They know that pigs get fat and hogs get slaughtered!
When considering a buyers true profit on these REALITY TV FLIP SHOWS did they consider all the expenses involved with the flip?
Materials, contractors costs/labor and over budget expenses.
Holding costs for the property, mortgage payments, taxes, insurance, homeowner’s association fees, utilities, water, sewer and electric bills, from beginning of flip to day of sale.
Did they factor in costs to purchase the property? Advertising costs to sell the property? What about closing costs to sell the property, including REALTOR commissions? Did they figure out how much their capital gains would be to Uncle Sam in taxes, on the profit?
Most importantly, did they pay themselves for their sweat equity – the time that they spent working on the property or managing the property while it was being worked on? Their own cost for their own time? How many hours were they there? 100’s? What other job did they take themself off of to work at that property or supervise or check on the job? Could they have been making $25 an hour somewhere else, but worked there instead? You must pay yourself for your time.
What about gasoline costs, and vehicle wear and tear? What about telephone/cell phone bills?
The list is extensive.
How many of these shows depicted “real world” situations?
Did these shows give the public a distorted view of the real estate market?
How many people jumped in blindly, based on the information they got from these shows?
We had oodles of calls during the craze of these shows, from people that wanted to buy real estate like they do on TV.
IF WE HADN’T HAD THESE SHOWS, WOULD THE REAL ESTATE MARKET BE IN THE CONDITION IT’S IN TODAY?
Funny, I don’t remember seeing a TV show on how to shop for a lender, compare 3 good faith estimates and make a wise decision in not over paying for a home in the current market. I GUESS THAT ONE WOULDN’T HAVE GOTTEN VERY HIGH RATINGS!
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