Reality TV house flipping shows are all the rage, and have been for quite a few years. That being said, this just begs the question: “Should real estate investors watch these shows? Are they helpful to your career, or detrimental?” This article is going to shed some insight on the debate of how these reality television shows can impact current (or interested) real estate investors.
We’ll list the advantages (hint: there are minimal) and disadvantages. You’ll also probably learn a little more than you hoped to about reality television. The main goal is to answer why or why aren’t house flipping reality television shows useful to your current or potential real estate investing business.
Also, these shows portray many buyers that pile in wanting to come see the house. The hard truth is that real investors not only work really hard to find the great house flip deal to begin with, but also to find buyers who’d even be interested in picking up the property. There’s another article on this site that will teach you that the first offerer on a house is almost always your buyer. Even if you don’t check out that article, remember that! Never reject your first offer. Don’t even think about countering it too high.
What’s interesting as well is that these real estate investors seem to know everything. In no episode are they seen doing actual research on a property. Somehow they “just know” the costs, repairs needed, market information and have all the data inside their head. They’re never found researching, comparing and learning. Does that seem at all unusual to you?
Reality television house flipping shows are for entertainment, not education
Without a doubt, these reality house flipping shows are created to entertain you, not to teach you. If you think otherwise, you’re wrong. If you are going to watch these shows, be sure you’re doing it for pure entertainment value because that it what they are designed for, and it’s all they’re good for. You honestly may as well be watching Bravo! or E! Entertainment. These reality house flipping shows are not going to properly teach you how to flip houses for a profit. If anything, it could hurt your business if you’re watching them for learning purposes. Television is great entertainment, but as a form of learning, it sucks for the most part.
Reality TV flipping shows are actually terrifying to an investor who watches one. Why? because they make the average person think that they too could invest just a little money, renovate it, and sell it for huge profits.
They’re focused on renovations, which is not what investing is about
Reality house flipping television shows focus on the actual renovation of houses. People love to see “before and after’s” no matter what the project was. Especially when it comes to homes. They love to see an old, decrepit house transform into a gorgeous showpiece that looks as if it could grace the cover of Veranda or Elle Decor. Somehow, they are able to transform a house within 30 minutes.
Most of the show is spent fixing up the house and dealing with the contractors. Of course, they add a bit of drama into it in order to keep viewers’ attention. In the real life of real estate, the less time you spend renovating the better. You should actually renovate as little as needed. Your time should be spend negotiating fantastic deals, and finding creative ways to reduce your expenses. This is how you are going to make money. For successful real estate investors, time spent renovating is small. Of course, there is some involved at times, but more often than not, they are spending time doing other things regarding the property.
Focused on the “open houses”
Just about every show is about gearing up for the open house date. The house has got to be done by a specific time and day for the open house. While that might motivate the contractors on the show to finish, real-life investors do not have open houses immediately, and they’re certainly not scrambling around to prepare for an open house. It’s also interesting that they seem to have a large pool of potential buyers at that “open house.” That’s not reality.
Surely you’ve seen “Flipping Houses” on Bravo. They’ll show ugly homes and the “entire” transformation of them. It’s really powerful the way that they can perform a renovation that takes a year in one hour (less including commercials). They show great “before and after” scenes. Understand that you do not need to renovate a house in order to buy it and resell it at a huge profit without ever having dramatic “before and after” photos. In fact, you should never have to entirely renovate a house in order to make a profit.
If this is what you do, it’s highly likely that you’re either only breaking even, or you’re losing money. You’re certainly not making the profits that you would be if you’d only put the drill down. The problem is, the house flips that really make the money don’t make for great television because they don’t call for dramatic renovations such as the ones on television, so they don’t show them. When people who watch these shows become interested in house flipping, they’ll decide to try their hand on it with the assumption that they’ve got to take a bulldozer to the property. Common mistake.
Taking renovation plans way too far
Watching all of these demolitions is seriously detrimental to an investors career. They’ll start removing entire parts of a home. They’ll rip out wall partitions, move bathrooms, re-design the kitchen layout. It’s really pretty unbelievable. And tragic. At times, a successful real estate investor will do these things to a particular house. But for the most part, it does not require doing any major work to the house.
It typically only involves cosmetic fixes such as new paint or new flooring. It’s very common to see new investors going into a new property that they’ve purchased and gutting it to start all over. They’ll go so far as to re-design a floorplan. Sadly, most of them lose money on the deal in the end because they over-renovated the house. Here’s a tip you should try to remember: if you ever see yourself with a hammer in your right hand, a mistake is about to be made. Know that.
The actual profits they claim to have rung in aren’t entirely (or nearly) true
Reality television programs don’t show you the whole story in terms of profit data. Most of the time, the profit they tell you is garbage. They probably aren’t including that they got the materials for free by mentioning the manufacturer when they were subtracting the expenses, for example. The profit number that they supposedly made on the house is entire nonsense. Again, this is for the network to enhance their ratings so that they can make more money. Saying they made a huge profit really adds to the drama; people love to see the value of a house go from $100,000 to $950,000. It grabs your attention.
They don’t take many costs into account when adding up that number. The real truth is that you’ve got to pay a lot more expenses than they mention like fees, holding costs, commissions, and closing costs. All of those factors are left out of the overall profit number they come up with. They also don’t show you how hard it is to get financing for a property that needs to be flipped. Many times, a home will be owned by the bank.
Even just getting the deal closed on a property such as this can take months and months. And there’s a lot of headache involved. Actually, an entire season of a real-life house flipping show could be centered around getting financing on one particular real estate deal. That’s how misleading these reality house flipping television shows are. In fact, do you ever notice that on these shows, the house flippers tend to all pay cash for their deals? The shows tend to portray that real estate investors have some sort of magic money tree that never runs out of money.
And the truth is, for the most part, after analyzing the data on a house, most of them you wouldn’t buy because they tend to not be that great of a deal. The shows make it seem like the investor simply found a fantastic property out of thin air. Magic? No.
They’re centered around drama
These shows have way more drama than would ever happen in real life. In the real world in real estate, if you treated a worker or colleague like that, you wouldn’t be in the market for too long. Also, if you really pay attention, you’ll see how scripted the shows actually are. Ever notice how the investor buys the house without even looking at it? Absolutely no real estate investor would do that, ever. It’s absurd. Just about everything in the show is a lie. Yet so many people see the shows and think that they can become rich from flipping one house. Some people will even take their savings to invest in a property just like the one on the show.
The main argument people make to back up why these shows are educational.
Many will argue that you can get some good ideas from these television shows. However, these shows are in a totally different market than yours. If you really want a lesson, go to a model home in your area and educate yourself with what they used. Really study the materials, textures, and paint colors. Honestly, that’s going to be a lot more effective, serve you far better, and probably be even more entertaining, than watching HGTV on your sofa. You’ll certainly learn more. Also, successful investors don’t have the time or desire to watch those shows. They know that the shows and everyone on them are completely full of it. Plus, if they want to deal with a contractor, they’ll do that at work in the morning. Do not spend your time watching these shows with the mistaken notion that you are learning.
The influence of television; whether we like it or not
Interestingly enough, studies have actually shown that your brain is more active while you are asleep, rather than while you are awake watching TV. They have concluded that the effect television has on your brain can actually lower your ability to separate fact from fiction. You’ve got to be cautious of what you are pouring into your mind while you are awake. This actually is true down from what you read, or listen to, to who you spend your time with. Be careful about the information that you are taking in. This is another reason why you should avoid negative people. Everything you listen to will affect your outlook on life.
To wrap things up, reality house flipping television shows should be used solely for entertainment purposes. After all, that is what they are specifically produced for. The network of the television show is not concerned about whether or not they are educating you, they’re concerned about increasing their network ratings. You are far better off finding some other program to entertain you. Generally, you are what you watch. Try listening to a great podcast on how to select materials, or reading an investing book. Time could be spent much better, and more efficiently than watching the Bravo! channel. Swear.
Not only are these programs highly inaccurate at portraying what it is truly like to flip houses, but they also teach some really, really bad lessons. House Flipping TV Shows are produced for entertainment purposes and there is little regard given to educating viewers on how to flip houses productively. In fact, if you are, or plan to become, a real estate investor, you would probably be better off finding some other way to entertain yourself because ultimately, you are influenced by what you watch and you’ll at some point begin to make poor investing decisions.