Has 'Flip This House' jumped the shark?

Myth propagated by bitter ignorant renters, or statistical reality ignored by real estate professionals?

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Has 'Flip This House' jumped the shark?

Postby redmondjp » Sun May 04, 2008 2:11 pm

Last night on A&E I watched the latest episode of 'Flip This House' which was focused on a 50-year-old house in the Atlanta area. The tore out the entire kitchen (which had just been redone), well, actually after they found massive termite damage, they literally rebuilt one end of the house from the ground up. They redid a lot of other items as well (I'll have to give them credit for doing an excellent job on repairing all of the hidden termite damage, as many shady flippers would not have even bothered to check for that). All I can say is they have some really inexpensive contractors down there, given the prices they were showing (such as in $2K for a new roof, when I paid $8K for basically the same roof here).

At any rate, after five weeks of rehab on this place, the projected profit to the flippers, after all costs & RE commissions, was a paltry $2K+. Heck, the selling agent was going to make three times that--$6K.

So basically, these guys aren't going to make any profit at all on this latest flip and will most likely lose money on the deal if they have to reduce their asking price at all.

I think the flipping reality show concept is now officially dead. The desperate homeseller reality shows, on the other hand, will continue to flourish, I predict.
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Re: Has 'Flip This House' jumped the shark?

Postby ira s » Sun May 04, 2008 3:11 pm

How about a reality show "Lose This House."?
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Re: Has 'Flip This House' jumped the shark?

Postby RottedOak » Sun May 04, 2008 4:39 pm

redmondjp wrote:I think the flipping reality show concept is now officially dead. The desperate homeseller reality shows, on the other hand, will continue to flourish, I predict.

"Property Ladder" has long combined the two genres by showcasing inexperienced flippers who are in over their heads. "Buy Me" also tends to focus on the difficulties of selling. Lately I've noticed a new wave of shows that aren't entirely rosy about the selling process, notably "Secrets That Sell" and "Get It Sold." Still, I don't expect the shows about flipping (such as the aforementioned "Flip This House") and super-positive staging/renovation shows ("Designed to Sell," etc.) to disappear. These shows have the luxury of looking around the whole country to find the best possible market situations, and editing the show to minimize the negatives. Since there will always be viewers who want to see the market in a positive light, they will continue to have audiences.
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Re: Has 'Flip This House' jumped the shark?

Postby redmondjp » Sun May 04, 2008 10:59 pm

RottedOak wrote: . . . Still, I don't expect the shows about flipping (such as the aforementioned "Flip This House") and super-positive staging/renovation shows ("Designed to Sell," etc.) to disappear. These shows have the luxury of looking around the whole country to find the best possible market situations, and editing the show to minimize the negatives. Since there will always be viewers who want to see the market in a positive light, they will continue to have audiences.

You make my point perfectly here--yes, they have the luxury of looking around the entire country, and even still the best flip they can come up with this week, at the most, will net the investors a couple grand? That's not even worth getting out of bed for. Time will tell I guess . . .
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Re: Has 'Flip This House' jumped the shark?

Postby johnsgonefishin » Fri May 09, 2008 8:10 pm

I propose a new realty show called "Wheel of Foreclosure".
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Re: Has 'Flip This House' jumped the shark?

Postby rose-colored-coolaid » Fri May 09, 2008 8:54 pm

johnsgonefishin wrote:I propose a new realty show called "Wheel of Foreclosure".


Wheel of Foreclosures spin spin spin, mail in your keys if you want to win.
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Re: Has 'Flip This House' jumped the shark?

Postby Patrick Bateman » Sat Feb 16, 2013 8:28 am

When the average cost of homes was going up, any real estate investor had a built in 'put' on their investment. Basically, the flipper had three possibilities:

1) First off, the work that they put into the house may have proved profitable, and they'd walk away with some money
2) Second, the work that they put into the house may have proved UNprofitable, but the loss of profit was offset by the increase in home value. For instance, let's say they invested $10,000 in the home, but only netted $5000 of their investment. If the home cost $300,000 and homes were going up by 10% a year, and they spent 6 months doing the work, then they could sell the house at a $20,000 "profit". (IE, 100% of their $5000 loss was offset by the 5% increase in home value.)
3) The cynical among us would note that they could simply do nothing, and walk away with a $15,000 profit in six months.


But when property values began to decline, the tables turned completely. For instance, if property values declines by 5% in six months, and their renovation netted a $5000 return on a $10,000 investment, than the 'flippers' would be out a whopping $20,000! (Most of the loss is due to the fundamental decline in home value.)

Basically 'flippers' in 2008 were battling against the tide. No matter how much work they put into a house, declining property values were likely to destroy any profit.
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