House Flipping…
One reason I STILL haven’t finished Madame Bovary is that I’ve been ignoring poor Emma in favor of TLC. My latest addiction, after Take Home Chef and What Not to Wear, is Flip That House. I enjoy watching them tear a place apart and put it back together, and find out how much they’re going to make on it…which is always a lot of money considering the amount of time they put into the deal. Like maybe $80k in two months. Nice, huh? Yeah, I’m a big loser failure in that department, clearly.
I do find myself wondering, however, if these deals ever go bad? At the beginning of the show, the narrator says that the ‘stakes are high, and it’s risky’, and yet…these people are all doing quite well for themselves. So where’s the risk? Perhaps, Flip That House is hiding the truth from us, and the risk is over on HGTV, on a show called Buy Me. This show isn’t really about house flippers, it’s about folks trying to sell their homes. But the one and only episode I’ve seen thus far was a flip episode…a couple bought not one but two houses, hoping to flip the first before their first mortgage payment came due. (That’s about a month, for those of you renters out there.) I got the impression that they would then flip the second house with the profit from the first flip, but the website says that they were hoping to take the profits to update the second house and live in it themselves.
The husband of the couple works as a contractor, and the wife is a mortgage broker, and she had flipped a couple of condos before, so it SEEMED like they knew what they were doing. It turned out, however, that the husband had to put his contracting business first, so as to pay bills, etc. The wife didn’t know how to do a lot of the work on her own, didn’t have the tools, etc., so there were lots of shots of her standing around, looking frustrated that days and weeks were passing by, and nothing was getting done. So, since she couldn’t do anything around the house, what did she do with her time? You guessed it, she went shopping. She was addicted to garage sales, and wasn’t really paying any attention at all to how much she was spending. That’s pretty much never a good idea, unless your last name happens to be Trump or Spelling. The next thing you knew, the mortgage payments on both places were due…and then another month went by, and she was hiring contractors to do the work, becauase her husband was busy with his own business. Each month that they had a mortgage payment to make decreased their profit margin by that much. Add to that the cooling real estate market, and the costs of having contractors doing the work when they had planned to do it themselves, and it’s starting to look a little bit risky. At the end of the show, the situation still wasn’t resolved. The house was complete, and looked great, but maybe 8 months had gone by since they first started, there were TONS of houses on the market, they had lowered their price several times, and still, no sale. The profit margin was pretty much gone, and they were hoping to break even. Ugh.
Part of me was sad for them…I wanted to see them make it work, wanted to see a happy ending. But part of me was glad to see a show with something a bit more realistic, an episode of one of these programs that showed the very real risk involved in ‘flipping homes’ for profit.
14 Comments
Ml
The whole flipping thing is a scary venture, to me. I guess I’m not a big gambler in that respect. It’s nice that they showed some realism though because that happens more often that the other way around.
Py Korry
The old real estate saying is probably accrate when it comes to flipping homes: “location, location, location.” Some places are obviously better markets than others, so I suppose the moral of the story is to do research into market conditions before entering into a house flip investment.
Gina
I think the time for flipping is over, at least for a good while.
I get mad at the flippers, because even though it is their right to make money, they are a huge part of why real estate prices skyrocketed around here. So, that leaves me stuck.
Beenzzz
Flipping really has become a big thing lately. Even though it sounds tempting, I’m cautious of all the risks involved. You really need to have a keen sense of the real estate market, or you might just end up losing a bucket load of money!
Maya's Granny
I think that Gina is right. The time when this would work reliably is gone. And Py is right — the location is a big thing. If you found a well built fixer-upper in a prime location and could do the work yourself (had not only the skills and tools but also the time), it might just work.
J — do you remember that the Van Whyes used to buy houses in terrible shape, live in them while they spent a couple of years fixing them up, and then buy up? They had gone from a one bedroom flood damaged house to a very nice three bedroom when we knew them. And Jean said the closer her house got to good shape the sadder she got because she was always going to have to leave it.
J
Mom, no, I don’t remember that. Guess because I was 5 or 6 at the time…
lalunas
Flipping was great when it first started. Now so many people are doing it, the flip time takes longer and they flippers barely make even or don’t. A few months ago I read an article that gave the statistics and risks of flipping. It is a chancey business.
wordgirl
I’ve never read “Madame Bovary”. I feel as though I’ve missed out. Have I?
V-Grrrl
Madame Bovary is worth it. She had her own marriage and consumer issues, worthy of a show!
My sister and her husband, both MBAs, were nearly pushed into bankruptcy by a flipping scheme gone bad in Atlanta. I’ve known people who did it successfully in Virginia. Yes, they made money but it was A LOT of work and A LOT of stress!
hellomelissa
sometimes on “flip that house” i find the makeovers to be bland and sterile.
the situation you described about the couple trying to do the flip themselves reminds me of my friend lisa. they’ve been “flipping” for like 6 months now. there’s nothing you can say, but i’m afraid that after all the work they’ve done, they won’t make a dime.
joan
I agree with Gina, with the market the way it is, I think flipping is over for a while. I like the show but it aggravates me at times. The owner will decide on something ridiculous. There was one episode when the owner decided on a really, really unusual and expensive vanity but opted not to have a washer and dryer connection.
Random Kath
Flipping is definitely an art – the problem is that when the prices of houses started going up-up-up lots of people who should have known better ignored the risks and only looked at the dollar signs.
Buy Me is one of my very favorite shows – some of the stories just tug at my heart – such as the ones where people are moving because of unfortunate circumstances like a death or divorce – but some just make me mad, because the people are jerks with an inflated sense of what they think their house is REALLY worth . . .
Lotus
We watch “What Not to Wear” all the time and I daresay I have learned quite a bit about “putting clothes together” from that show. Have never watched “Flip that House” but you have made me curious about it so maybe I’ll do it soon.
Mme. Bovary used to be one of my favorite reads, but when I read it last time (for the third time I might add) I finally stopped thinking about Mme. Bovary as a sad romantic who needed more than her husband could give her, and saw her for the selfish, immature person she really was. Would love to read your impressions on the book, J.
J
Lotus, I think that’s what’s tripping me up here…when I was young, YOUNG I TELL YOU, Emma seemed like a tragic figure, as you said, romantic and needing more than her husband could give her. This time through, with me in my early 40s, all I can think is, “Suck it up missy”. Though when she went for help from the priest, and he blew her off, and her husband and mother in law decided for her that reading novels was now forbidden…and I think, a woman of her class and time, she didn’t have much to occupy her mind and time…so I still see her as tragic. I just wish she had more spirit, and could find a better way to deal with her enuui.