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Besides being a broker who still owns a handful of rental properties in both FL & CA, & has bought & sold (for a profit) numerous short sale & REO properties over the years...
...I was also a licensed pool builder & general contractor in LA for 2 decades before the crash.
The other night on Flip or Flop, Tarek & Christina were crying about the pool filter & pump that got stolen on their unfinished rehab.
In the end, they showed a budget of $1,000 to replace the missing equipment.
The only thing is, I know (from building on average 50 pools a year) that the big filter & new circulation pump cost approx $550 & $400 (wholesale) plus tax just to get the replacement parts delivered.
And then you have to hire a licensed electrician to wire the pump, & a pool plumber to re-plumb the manifold that was destroyed by the thieves when they ripped out the old equipment.
Even if you hired an unlicensed swimming pool serviceman to perform the work that rightly should be performed by a licensed subcontractor, you'd be looking at a minimum of $300 additional in labor costs just to finish the job.
That's just one example of why I think this show routinely underestimates true costs by as much as 30-40%.
And those two TV stars are always talking about utilizing hard money loans, & credit card advances, & help from mommy or other outside investors...& they buy the houses "unseen"...yet always seem to profit 30% give or take, no matter how bad the unforeseen problems were.
They're full of sh*t. Especially when Tarek shows up in rubber flip flops to demo a house.
Don't forget Armando from the other show. He always claimed to be in process of flipping 30 houses per month, which would mean that he had a crew of hundreds on staff that were never shown.
But then someone pulled the property records from his area to find the few flips he actually owned, and many of them were in foreclosure (his, not the prior owners).
But as BrokerHarry mentioned, Tarek would need to spend a grand just on the filter and pump, unless he severely undersized the equipment. The labor for electrical and plumbing is on top of that, although anyone handy with PVC fitting could handle that part.
Besides being a broker who still owns a handful of rental properties in both FL & CA, & has bought & sold (for a profit) numerous short sale & REO properties over the years...
...
They're full of sh*t. Especially when Tarek shows up in rubber flip flops to demo a house.
Sing it Harry! I'm in NoCal, and I know what home renovations cost here and I also know that darn near everything is more expensive in SoCal. So when T&C get an estimate from their "contractor" that rehabbing a dump that needs a complete tearout of the interior will cost them about $45,000 I multiply that figure by a factor of three to get to reality.
But I don't understand who benefits by the gross underestimation of costs that all of the flipping shows indulge in. Is it banks trying to increase the purchase price of foreclosures? Anybody got any ideas??
Don't forget Armando from the other show. He always claimed to be in process of flipping 30 houses per month, which would mean that he had a crew of hundreds on staff that were never shown.
But then someone pulled the property records from his area to find the few flips he actually owned, and many of them were in foreclosure (his, not the prior owners).
But as BrokerHarry mentioned, Tarek would need to spend a grand just on the filter and pump, unless he severely undersized the equipment. The labor for electrical and plumbing is on top of that, although anyone handy with PVC fitting could handle that part.
I noticed his show is still on in reruns. His repellent personality and unethical business practices come through loud and clear even though he's the "star" of the show. The residuals from it and the seminar fees are his income source, not flipping houses.
Sing it Harry! I'm in NoCal, and I know what home renovations cost here and I also know that darn near everything is more expensive in SoCal. So when T&C get an estimate from their "contractor" that rehabbing a dump that needs a complete tearout of the interior will cost them about $45,000 I multiply that figure by a factor of three to get to reality.
But I don't understand who benefits by the gross underestimation of costs that all of the flipping shows indulge in. Is it banks trying to increase the purchase price of foreclosures? Anybody got any ideas??
Good question. Perhaps people tune in to be amazed at the profits...sort of vicarious living? Personally I'd love to see a show where most of the flippers go down in flames. That would be fun. And more realistic. How many people have taken the leap based on these shows? What became of the venture?
I know very few people who can tackle a project like that with so many skillsets required (and none of them are licensed to do all of it). So bring in the contractors, and since you are a one-off, you get not much in the way of discounts or working with time constraints. And now you are talking big money (as you noted).
I noticed his show is still on in reruns. His repellent personality and unethical business practices come through loud and clear even though he's the "star" of the show. The residuals from it and the seminar fees are his income source, not flipping houses.
and his brother is in deep hole.
You can almost go to any market and hear about the seminar of how to flip. Limited free seating and starter kit. It's all a scam, some version of Tom Vu from the 1980's
Good question. Perhaps people tune in to be amazed at the profits...sort of vicarious living? Personally I'd love to see a show where most of the flippers go down in flames. That would be fun. And more realistic. How many people have taken the leap based on these shows? What became of the venture?
I know very few people who can tackle a project like that with so many skillsets required (and none of them are licensed to do all of it). So bring in the contractors, and since you are a one-off, you get not much in the way of discounts or working with time constraints. And now you are talking big money (as you noted).
And in one of the recent reruns, Tarek let slip my most *favorite* flipping quote of all time (sorry if I don't remember it exactly): something like "I HATE spending all this money on non-cosmetic things!" OMG -- this is the reason I'll never buy a flipped property! You get the granite (<gag!>) countertops, fancy shower tile, and blinged-out staging -- and also the old furnace, roof, water heater, and inadequate insulation. In a lot of their flips, you can see the old gas-fired wall furnaces in the newly staged "open concept" great rooms, meaning no central AC folks! IMO, I'd much rather have central heat and air than a ton of shiny rock on my kitchen counters.
Last night there was a special Flip or Flop which sort of went behind the scenes of a couple of shows. It showed you some things that the show did not cover like added expenses and reasons they did some of the things they did. They also visited one of the homes they had done and got a tour. The place looked great and the new owner loved it. It had a pool and she said her grandchildren are always in it. I am not sure if the show will be repeated or if it is available on-demand but if it is I would suggest you check it out. Jay
And in one of the recent reruns, Tarek let slip my most *favorite* flipping quote of all time (sorry if I don't remember it exactly): something like "I HATE spending all this money on non-cosmetic things!" OMG -- this is the reason I'll never buy a flipped property! You get the granite (<gag!>) countertops, fancy shower tile, and blinged-out staging -- and also the old furnace, roof, water heater, and inadequate insulation. In a lot of their flips, you can see the old gas-fired wall furnaces in the newly staged "open concept" great rooms, meaning no central AC folks! IMO, I'd much rather have central heat and air than a ton of shiny rock on my kitchen counters.
Yes he did say that but I remember that he went ahead and fixed the problem. I can't ever remember them not fixing problems they uncovered but then again I doubt they would show that on the show.
I also remember a person posted on the HGTV website a complaint about one of the houses they had bought from them. Tarek almost immediately responded to the poster to contact him and he would resolve the issue. He noted that the home was likely still under warranty but if not he would still resolve the issue. Not sure what the issue was or what became of that though. Jay
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Who benefits from the underestimates?
