Are those “reality” flipping shows on TV an accurate description of what happens in real life when renovating a property? Find out how fantasy TV scenarios create unrealistic expectations and are rife with bad decisions in this common sense post.
About the Author: Matt Lavinder is the founder of New Again Houses which develops several properties every month and sells them through its unique Bridge to Own Program.
I get home late and Hollie is watching one of those flipping shows on HG TV. “Just keep walking,” she says. “I don’t want to hear your rant.” Yeah, she’s heard it before, but I really hate these shows. The story line is always the same. It starts with an ego driven purchase by the real estate investor who has an inflated sense of self-importance. His beautiful wife makes ridiculous design decisions, like putting Italian marble floors in a war zone location. Then, 24 hours before the open house, Mr. Big Ego pushes the magic “Contractor Super Speed” button. Every contractor in town goes into warp speed and they finish on budget, just in time for the open house. Of course, they put it under contract that day and pay no agent commissions, interest, or any other expense out of their big profits.
Easy, right? Well, it is on TV. In the real world of this business, big egos usually make really bad real estate decisions. There are no magic contractor buttons to make up for the Italian marble decisions. Every contractor in town doesn’t forego sleep for 48 hours to get it done for your open house. And, there are a lot of quiet costs that come out of that bottom line.
It’s a rewarding, but very difficult business. We try to make decisions based on good math rather than emotion and ego. But, at the end of the day, success is usually down to the quality of your partners. It takes a team of talented contractors, investors, real estate agents, attorneys, accountants, insurance agents, mortgage brokers, and suppliers to be successful. They flip houses on those silly shows, but the real challenge is building teams that can flip all those houses.