What Fix and Flips shows won’t show you
November 30, 2020
Shows like Flip or Flop, Million Dollar Listing, and Fixer Upper garner such great ratings because of their ability to sell viewers on the dream that anyone can turn a leaky one floor wreck into a million dollar mansion with just a little elbow grease.
While renovating a home can be a financial life changer, here are a few less flashy things that these shows don’t want to talk about.
Of course a one hour tv programme is not going to show how long flipping a home can take, but the process looks so fast one may believe that flipping property could be an easy side hustle.
The reality is that flipping a home takes a lot of time and energy. Time researching the right property to invest in. Time spent on leads that don’t pan out. Time renovating the property and strategizing which renovations the property needs. In short, success in this field requires a lot more time than these shows would have you believe.
Selling can be the hardest part
A lot of these shows gloss over the selling part and emphasize the renovation. It gives the impression that these properties are inundated with potential buyers as soon as they get to market.
The truth is unless you already have a buyer in mind, selling can take months even with a real estate agent. It requires you to have a stable network of potential buyers to reach out to before even starting the process of buying your fixer upper. It also requires plenty of fall backs in case your first group of leads don’t pan out.
The hidden costs
When you see these shows there’s often just two numbers. What the property was listed when they bought it, and what the property was sold for. But there are so many other costs that these shows don’t include. Here are just a few:
Property Taxes – make sure you know the taxes of your county by checking online which you can do here.
Insurance – A solid way to estimate the rate is divide the value of your property by 1000 and multiply by $3.50
Closing Fees: – 2-3% for your listing agent and your buying agent each!
All of the sudden those glossy margins aren’t as big as you might have hoped.
When it gets down to it, Fix and flip shows are meant to entertain not to inform. While there are useful nuggets there, these shows are no replacement for proper research and expert guidance. However if you don’t let these shows spoil you with a false reality you can still make your financial dreams come true.
Norfolk Capital goes beyond lending services to mentor developers in their journey. Give us a call to see how we can help you find success with your next fix and flip.
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