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‘Flip or Flop’ on HGTV is a big pile of horseshit

May 25, 2015

flip-or-flop-tv-showMy wife likes to watch HGTV and recently they’ve been running a lot of “Flip or Flop” – a show about an Arab guy (Tarek) & his bimbo wife flipping houses.

Now, I’m not trying to “hate the player,” so to speak but I’ve been in the real estate business for 10 years and let me assure you, this show is 10 pounds of shit in a 5 pound bag.

Here’s the typical script:

Tarek finds a fixer-upper house.

Tarek bids on the house.

Tarek purchases the house.

Tarek & bimbo pour money into the house, encounter bad stuff along the way (i.e. plumbing/electrical problems, etc), but always end up listing the house & getting a full-price offer (sometimes multiple) in short order.

I sat on the sofa while the wife watched like 5 of these in a row and they they made at least 20% on their investment every single time.

Let me assure you, the real estate novice, of a few things:

  1. NOBODY makes money on every single deal.  Nobody.  It isn’t possible.
  2. They fail to disclose how they’re paying mid-6 figure cash for these houses.  These are auctions, so you can’t get a conventional mortgage.  Unless Tarek is Saudi royalty, the most likely scenario is they’re getting “hard money” loans which carry a HIGH interest rate with them.
  3. Given #2 above, the “profit” they show doesn’t take into account the (sizable) chunk they have to cough up to their hard-money lender.

I like real estate shows as much as the next guy, but this mess is about an accurate a depiction of the “house flipping” business as “Space Jam” was of an NBA game.

Change the channel.

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From → Real Estate

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