Think Flipping’s as Easy as it Looks on TV? My Story Will Change Your Mind!

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I bought this flip, and it started out so well. It was a 3/1 in very good side of town. We bought it for $127k, and our renovation budget was $90k, giving us an ARV of $325k conservatively. That $90k renovation budget was going to add a master suite, an open floor plan kitchen and an additional 750 square feet to the already existing 1,006 square feet.

The hard money lender came out, evaluated the deal, and said, “You know what? I don’t really like the location, but I like you guys. I will do the loan.” He then stated, “I want 10% down. I’ll do a $100k rehab, with 13% interest and 5 points.” (Note: a “point” is a fee added by the lender. One point = 1% of the loan amount, so 5 points = 5% of the total loan amount.)

We stomped our feet like 4-year-old children about the down payment. My partner hates down payments. I am new to rehabbing — especially doing it the right way that puts you in a position to make money. I figured down payments are not that bad. It’s only once you get multiple projects going on that you look at your account and realize down payments are the devil. We decided to go through him to get the loan. We closed the deal. It took about 3 months to get started due to acquiring plans, going back and forth with the city, and just dealing with life.

Related: Flipping Houses: 101 Awesome Quick Tips for Success

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A Behind-the-Scenes Look at a Flipping Show

Before we were able to get started, a TV network posted an ad on their Facebook page stating they were looking for Charlotte house flippers. I thought, why not apply and see what happens? I applied and went back and forth with the producer. At the time they needed a house to film a pilot because they wanted their popular TV show host to have her own flipping show.

I agreed, and they paid me $250 for the day to use this property for filming. I think it was a reality shock to the directors and producers to see real house flippers flip a house because, of course, like the cheapskates we are, we did not have electricity, water or a decent place for them to use the bathroom.

The director told me to stand by because he might need me for a scene or two for shooting. I was like, “Of course. I’m about to get an Oscar for this performance.” As the morning went on, the TV host played the realtor/flipping adviser. And as for the flippers, they were paid actors. Yes — the people who claimed to flip the houses were paid actors.

The director was yelling at them because they kept asking me questions about how to get started in flipping. The director needed them not to break character and continue to act. Who would have guessed it that TV is fake. After the morning taping, they went to lunch, and I advised the director to just lock up when he was done. I got tired of sitting on the bench hoping they would put me in the game like my name was Rudy…

The Rehab Project

Well, as you previously read, that taping did not go too well at all. At this point, rehab started. We got the plans in and started the extension to house. After we laid the foundation, framing was up, and then we realized there was a support beam in the middle of the kitchen.

Related: 7 Signs You’re Entering Into a House Flipping Disaster

My partner tells me that is against code to have a support beam in the middle of the kitchen. So we had to get plans redone to move the kitchen. The contractor then tells us he’s come across things he did not expect in the initial quote. We are now $20k over budget. Oh yeah, guess what? The HM lender agreed to $100k. So now we must cover that last $20k in work.

brick in window

Then, on top of that, I get a call from my contractor about a note on the door — as you will see in the photo above this paragraph. Apparently, someone used a brick out of our front yard to break in to his house and steal a laptop. The guy had the nerve to blame it on us. I should blame the $20k over budget on him because he did his house so nicely that now we have to get ours done nicely too. 🙂

What’s the biggest fail you’ve experienced while flipping houses? What annoys you most about those “house flipping” TV shows?

Don’t forget to leave a comment below!

About Author

Nasar Elarabi

Nasar is a corporate failure who was saved by Real Estate. Nasar is now a Wholesaler, Rehabber and Landlord in the Charlotte area. Nasar may have just barely graduated college but can flip a house like an acrobat. Nasar's work can also be found at RealEstateDoru.com.

38 Comments

  1. Ayodeji Kuponiyi

    I would like to see a house flipping show that actually shows the day by day, step by step, beginning to end(in detail) of how someone goes about buying, renovating and selling a property. Most shows do this but in a 30 minutes to an hour time frame. I would rather watch an entire season if it’s detailed as oppose to 30minutes to an hour. It would make it much more real and show the good, bad, and ugly side of the business.

  2. Nasar,

    I have four houses on the market right now that I am into for over 2 million and a total of $90K over budget. 2 have fallen in and out of contract twice, 2 are sitting stagnant. A short sale I was supposed to close on this week had 4 liens placed on it over the last few days because the owner owes everyone money and they caught wind of him selling one of his houses. The escrow officer for another short sale I have under contract completely slacked on her job and because of this the short sale timeline may expire. I have flipped over 30 homes and to this point have never lost money and have done very well. Welcome to Real Estate and House flipping. Needless to say its been a tough week. If it was easy, everyone would be doing it.

  3. Nothing is easy until you get used to it I think. I have done over 20 Flips and I have a Cookie Cutter system. Get the house at a very good price, give the keys to the house to my contractor who has done all 20 for me, see him in 3 weeks and put it back on the market. I do the same thing in every house, Granite, Vessel Sinks, new floors, etc. Of course it took the first 4 to 5 houses to get my contractor to know what I wanted. It’s been working out well so far. Good luck with the current flip.

  4. Brett Lee

    I get calls from people wanting to get into flipping all the time and they think they can put a little paint on a house and be rich. These shows have made it hard for our industry. People are unrealistic and don’t believe me when I tell them how much things really cost. It’s a shame. Thank you for this. I will send it to people thinking about flipping.

    • I agree with Brett. Those shows have made it much more difficult for us. I also think those Real Estate Seminars make it hard too. They roll through the town for a week to get people to join for at least a 3 day class. Next thing there are new bandit signs everywhere “WE BUY HOUSES. FAST CASH” and they drive up prices because they don’t consider all the expenses with a flip. Then they lose money but also the deal is lost because the new Flipper way overpaid for the house.

    • David duCille

      I disagree, I think that it’s not as hard as people make it out to be tv shows what is possible and gives me good ideas for certain things. Costs are always going to vary by the area. I’m buying and holding, not flipping, but am currently cash out refinancing properties to buy others so that refi appraisal is like selling it. You gotta know your market or have people you trust with your life that know the market. Then it becomes a whole lot of simple math.

      • Nasar Elarabi

        @David Ducille,TV gets alot of people hurt financially. TV edits this whole process to 30 minutes sometimes a hour. That fact alone gave me the idea that Flipping would be an easy task. I got off easy losing 7k. It has been folks out here who have lost alot more than that because they watched a flipping program. Knowing your marker and having Trust worthy people is not enough to get you through a flip.. There are plenty of experience guys who still break even or take losses on a houses.

  5. Johnathon Griggs

    Just because it’s called “Reality TV” means absolutely nothing. What’s reality when film crews and camera’s are involved? Maybe nature documentaries?
    Just like anything else, the responsible thing to do is research, research, research… and of course understand all that information. 🙂 Real Estate investment involves huge amounts of everything: time, patience, money, skills, etc… of course, anyone on BP probably knows this.

  6. Great story!

    Interesting to hear about your experience with the TV show. Pretty wild to hear about the paid actors and their surprise with the lack of electricity and plumbing to use the restroom!

    Very common to uncover things in the rehab process. Good thing your partner knew the building code! Real estate investing can definitely have its ups and downs sometimes.

    I enjoyed the post, thanks for sharing!

  7. Gordon S.

    Nasar thanks for sharing. You confirmed something I have been suspicious of for some time… I think the most unrealistic one of the lot is Flipping Vegas….I watch it as comic relief to be honest….but on the other hand I am a pessimist at heart and that is how I’m dealing with my first potential flip.

  8. I agree with Gordon. Flipping Vegas is very unrealistic. Flip a house in a week and no matter what unexpected expenses they have, they always make money!! Now they are on the real estate seminar circuit. Go figure.

  9. Michael Askew

    This was a great read Nasar! So many people feel as if they have to only take one path in life which is school and corporate America. This article is proof that success is different for everybody and we owe it to ourselves to leave no stone unturned concerning finding our purpose and definition of success.

  10. Tony G.

    Notice how none of the TV shows tell how much the government gets from each flip? And related, the property brothers are the biggest phonies on TV. I laugh at the beginning of the show when one brother talks the potential owners into buying with a rehab cost of $X. The rehab cost always goes over because the brother always forgets simple things like pipes and wires in walls he states can be removed to “open up the space”.

  11. Here is another aspect that makes flipping extra hard. How about the Lenders that at the last minute say they cannot do the loan for the Buyer for your Flip? There goes the whole deal! Of course it’s always 3 to 4 days before the deal is supposed to close! All of a sudden your profit is pulled from under your feet and it’s back to the drawing board. On top of this, FHA has the 90 Day Flip Rule as of January 1st. Flipping houses is a real pain in the ass because of the Lenders who are way too strict now, the Low Ball FHA Appraisals even though you’re in contract for $10,000 more, the FHA 90 Flip Rule and that Buyers have to walk on water now to get a loan!! If you find a Conventional Buyer before the 90 days you will need 2 Appraisals. Overall, sick and tired of Lenders who hand out Pre-approval like it’s candy but change their mind later.

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