There are a lot of house flipping reality TV shows such as Flip This House, Flip or Flop, Masters of Flip, Rehab Addict…The list goes on and on. Fix-and-flips reality shows are fun to watch but they aren’t exactly realistic. Flipping a home can be both difficult and rewarding but it doesn’t have all of the drama like on TV. In reality, the majority of the process of house flipping is research. The refurbishing and selling part is only a small part of the process. Before you start house flipping, you should know how the process actually works versus how it’s depicted on TV.
These reality shows generally create artificial drama in order to make each episode more exciting. They will have the flippers argue with contractors as the deadline gets closer. Often times these deadlines are made up in order to add more tension. In real life, if the refurbishing takes longer than you originally anticipated, it’s not the end of the world. You should have an idea of how long the refurbishing process will take but you should always give yourself some leeway. Also, if you have a good contractor, you won’t be getting into arguments with them. Communication is a key part of your relationship with your contractor and if they don’t value that then you should look for someone else!
2. Hidden Costs
Here are the important numbers that you want to know: the cost of the house and the cost of refurbishing. However, there are a lot of other costs and fees that come with flipping a house that you will need to factor into your mathwork. You need to know the costs of property taxes, insurance, utilities, and closing. These are some of the numbers that house-flipping reality shows leave out. Next time you’re watching one of these shows, keep track of all of the numbers and see what it actually adds up to. You’ll be surprised at how often they leave out some of the math.
3. No Research
The least glamorous part of the house-flipping process is the research. However, it is the most important aspect. On house-flipping reality shows, the investor is rarely shown doing any actual research. This research involves looking at comps, public transportation, schools, proximity to grocery stores, etc. This is a long and tedious process but it is important to know these things so that you can have an idea of how fast the property will sell and how much you can sell it for. For example, it would be really hard to sell a house to a family if the school system has a bad reputation or if it’s in a bad neighborhood.
These HGTV shows usually make the selling process look a lot easier than it actually is. When you finish the rehab process, buyers aren’t going to be lining up outside your house. When you start flipping houses, you should have a trustworthy team that includes a real estate agent. The agent will sell your home and receive a commission (this is another cost you will have to factor in). When it comes to house-flipping, you shouldn’t rely on yourself to do everything. Having a professional team will help save you time and money.
* Watch This Special Limited Video *
Bonus Real Estate Tips From Yanni Raz