Breaking News: Newbie Flipper Makes Disturbing Discovery That It’s Not Like on TV


Richmond, VA — In a shocking realization that shook him to his core, newbie fix and flipper Mark Smith discovered recently that flipping houses “isn’t nearly as easy as it looks on those TV shows.”

Smith had seen TV shows that highlighted rehabbers, making the process look easy, fast, and just generally “a fun time with attractive-looking people.”

“It turns out, those shows aren’t completely accurate,” Mark lamented.

“I mean, on the show, those guys buy the house, tear it apart super-quick, then put it back together and sell for a huge profit. They always run into that ONE big problem — but it’s fixed within 24 hours, no exceptions.” Mark’s eyes glazed over with nostalgia as he reminisced back to a simpler time when flipping seemed like a fun afternoon activity to be sandwiched between meals.

What They Don’t Tell You

“They don’t show you how hard it is to find a good contractor, how long it takes to find the house in the first place, or even mention big ‘surprise’ problems like bad plumbing.” Mark continued, “Also, they make it seem like people are lining up to buy your house. I had to drop the price on my house four times before it sold, and I ended up losing money! I didn’t even get to slap that huge ‘SOLD’ sticker over the ‘For Sale’ sign like they do at the end of each episode of my favorite show.”

Mark shared the story of giving a sizable deposit to a contractor he found on Craigslist, only to have the contractor skip out on him and steal his money.

“That hurt. I was really embarrassed I got taken like that. No one on TV is ever that mean. I learned my lesson and didn’t give the next guy a deposit. At least I didn’t feel so silly when he didn’t show up, either.”

Related: 7 Ways TV Flipping Shows Are Completely Fake (As Any REAL Investor Knows!)

“Then I got smart. I asked a friend who he used to remodel his basement. That guy came out and gave me an estimate, but told me he couldn’t start for 3 weeks. But my friend Joe had used him, so I waited for those 3 weeks. Besides, I couldn’t find anyone else.”

The third contractor finally got started on the rehab, more than 6 weeks after Mark purchased the property.

“I started picking out things like cabinets and counters, tile, toilets and faucets, so that time wasn’t all wasted,” Mark added.


A $10,000 Problem

But his rehab soon took a turn again, when his contractor started demolition, and discovered aluminum wiring — something Mark hadn’t budgeted for but now had to replace.

“Apparently, aluminum wiring can catch on fire. I didn’t know that, and even though it was marked in the Seller’s Property Disclosure, my agent didn’t tell me that was a bad thing,” Mark said. “Rewiring the entire house cost me $10,000 I hadn’t planned on — and added another two weeks to the project when my contractor’s preferred electrician couldn’t start right away. I thought I could just list it at a higher price to make up the difference.”

“I can’t believe I had a $10,000 expense that didn’t even make the house look cooler,” Mark sighed. “I mean wiring is boring!”

Commissions and Holding Costs: Who Knew?

Mark’s real estate agent wasn’t very helpful during the purchase of the home. She recommended that he pay full asking price so he didn’t lose the home to another buyer. He trusted her judgment instead of running his numbers to make sure they made sense.

“Before I bought the house, she said it would easily sell for $50,000 more than I paid for it once it was all fixed up. But I think she was just guessing. I paid $135,000 for the house and ended up putting $45,000 into the remodel. Listing it for $185,000 when I’m all-in at $180,000 seemed like throwing money away. So I listed it at $200,000. I figured I would at least break even. The house sat there for 2 weeks before I even got a showing.

Related: 7 Things I Desperately Wish I Had Known When I Started Flipping Houses

“Turns out, the house was really only worth $175,000. I ended up losing quite a bit of money when you factor in the cost of the loan, the rehab itself, the real estate agent commissions that I didn’t think about when I bought the house. I’m pretty sure I paid too much for it to start off.

“Those guys on TV never talk about agent commissions or holding costs. I wish I had known about all these other things before I bought the house…”

house flipping

Don’t Make Mark’s Mistakes

After a few moments of reflection, Mark concluded, “If this teaches one potential investor that flipping houses is more than just swinging a hammer through drywall, picking paint colors that ‘pop,’ and then high fiving your ‘team,’ my bad experience will be all worth it.”

He then waved a quick goodbye, indicating that his favorite DIY show was coming on in the next few minutes.

Poor Mark. Did YOU know what you were getting into the first time you flipped a house?

We want to know your story! Leave a message below.

About Author

Mindy Jensen

Mindy has flipped numerous homes in the past 10 years, one at a time and doing much of the work with her husband. She lives in Longmont, CO, and is always looking for an ugly duckling to turn into a swan.


  1. Thoriso Mashego

    Wow, rookie mistakes. I had a few of those.

    I hope your friend doesn’t give up. It looks like he was down by $5000 which is not so bad. I think that is close to reality on a bad deal as you get.

    The loss is tax deductible. So about 20-30% should ease the pain.

    But I think the flipper shows do show the problems, they show how even with an established network you always ask the real estate agent to reduce their commission, the contractor to negotiate their price and you ALWAYS get multiple quotes. Based on my high school maths… asking for a 10% discount on the above would have reduced the $5000 by $500.

    And really Craigslist is a red flag. I don’t even want to get into that one.

    And it took 2 weeks to start showing the house?? Who is this agent? And he paid them full commission after that poor performance, poor pricing point. I hope he decides to avoid that agent OR cut their commission in half on every other deal until he makes up the losses. (If the agent is the only one in town).

    You friend survived, got a few valuable lessons for on $5000 (which is the price of a good Real Estate seminar).

    I think its a win if he redoubles and forges ahead.

  2. Ryan Schroeder

    Another great dose of reality from your blog. Thanks much.

    While I do Buy and Hold’s (have never flipped anything) I think I’ve learned that it is important to use realtors who have done their own investments and will be honest throughout the process. I’ve run into several realtors who just don’t know anything about construction and at the same time urge full price or better offers. I always do my own math of course and will never offer anything above the math regardless of realtor opinion but it is still nice to work with someone you trust.

    When I’m estimating repairs I also always put in a cushion because I know there will be something I’ve forgotten or underestimated so there has to be a contingency somewhere…and I only have bought property that needs a little love.

    On the after market value I’d suggest doing your own market research to verify the Realtor statements. It’s your money, not his/hers and so your incentive to get that right will likely be greater.

    I also agree with the comment that he should have negotiated a discount on brokerage fees

  3. Jerry Kisasonak

    Mark concluded, “… flipping houses is a lot more than just swinging a hammer through drywall.”
    Unless you’re doing demo, I think the idea is to hammer the nail and NOT put the hammer through the drywall! Keep learning Mark!

  4. The story also highlights the problem with buyer’s agents. They are supposed to have a fiduciary duty toward the buyer which implies that the buyer should be able to trust that the agent is using her expertise in the buyer’s best interest. However, the system does not align the agent’s interest with the buyer’s. Agents get no commission unless there is a sale, and the higher the sale price, the bigger the commission. Thus, agents often push the buyer into paying too much or fail to warn buyers about things like aluminum wiring. Agents often resent savvy buyers who know how to run their own numbers or dare to question the procedure of using comparable sales as the only valuation metric. Agents love flippers because they get a commission twice on mostly the same money: in his case, the $135K when he bought, and the same $135K + $40K when he sold.

    This story reminds us once again that you make your profit when you buy, not when you sell.

  5. Patrick Desjardins

    Mark got insanely valuable lessons and it only cost him $5k, which is reaaaally good compared. That’s a heck of a lot of knowledge and practical experience.

    Finding good, reliable contractors at a reasonable price seems to be the toughest part. I have grown to hate handymen in general because they have no ethics and zero pride when it comes to workmanship (of course there are exceptions).

    Thankfully if this guy does more rehabs, he will have a few of the pieces together.. and if he does another one after that, it’ll get better and better. That’s the thing they don’t show on those rehab shows. The TV person rarely is seen scrambling to find a guy for paint – they already have people to do it.

  6. Earl minnis

    I think Thoriso needs to take a 2nd look at his numbers. If Mark got a deal on the selling commission at 4 percent that would be 7,000. Int. on 135k at 8 percent for 5 months plus taxes and insurance approx. 1100.00 per month equals minimum 5,500.00. Loss of the 5,000.00 from the final sales price equals at a bare minimum 17,500.00 loss. That’s a decent loss on a very small deal. That didn’t include points, title, escrow, other loan costs. An easy 21,000.00 plus loss.
    An old adage says ” only lose a dollar on every deal but make it up in volume.
    Watching Hollywood will only get you into trouble. These shows are anything but reality. Spend your time in the field learning not watching the boob tube or computer. Earl Minnis

  7. Randy E.

    “It turns out, those shows aren’t completely accurate,”
    “No one on TV is ever that mean.”
    “I mean wiring is boring!”
    “He trusted her judgment instead of running his numbers to make sure they made sense.”
    “agent commissions or holding costs. I wish I had known about all these other things before I bought the house…”

    Thanks for all the laughs, Mindy. This was a super great way to start my day.

    No, I didn’t know all the things I was getting in for when I bought my first investment property, but I knew a heck of a lot more than he did. OTOH, other first timers knew a heck of a lot more than I did. The good news is he now knows enough to go execute a successful flip.

    Personally, I think wiring is super sexy. I get very excited knowing that my latest property is getting all new wiring and plumbing.

  8. Scott w.

    I’m gonna assume he had about 11% of the selling price in commissions, holding costs, interest, taxes, closing costs, seller closing cost credit – and that 11% is being cheap (I personally think it’s more like 14-15%).

    but still, 11%, equals a $25k loss. sounds about right.

    I feel bad for the guy but admire his honesty for newbs.

  9. Andrew Syrios

    I think this is the most sarcastic article title I’ve seen on BiggerPockets… nice.

    As far as those flipping shows go, I remember seeing them gut a 2000 sq. ft. house or whatever and then it would say their final rehab costs were like $13,000. SMH

  10. Javier Rancier on

    Thanks for sharing. I’m an appraiser and broker so I like to analyze properties backwards. I pick a development and determine the typical sales price for a rehabbed unit. Once I find a property, I can run the number in reverse order in order to estimate my maximum purchase price, budget repairs and estimate profit.

  11. Robert Steele

    I got a good laugh out of that article. Not because Mark’s a sucker but because it’s all too true.

    Still, if it was only a $5K loss then he’s learned way more than he would have by spending that money on guru courses.


    Loved the article. I am a newbie too, only bought one so far with very light rehab ($5K)…Everything is a learning process from dealing with general contractor, wholesaler, buying agents. You are right, most agents will push you to buy. I like to do my own due diligence and tell agents what I need instead of the other way around.

    Thank you for sharing.

  13. Good, realistic article. I am a rehabber and landlord. I would love to just buy and hold, but need chunks of cash from time to time. I watch those rehab shows once in a while, mostly for laughs.

    Start with the end in mind. ALWAYS know what your after rehabbed sell price is. Look at CLOSED COMPS. All realtors have those. Make sure you are in the same neighborhood, similar house, beds, baths, etc. If you need to, make intelligent, conservative adjustments. You would rather have a $10,000 surprise to the upside, than vice versa.

    Good contractors are always busy. Beware of the guy who can start “right away”. There is usually a reason he can start right away. Put a healthy contingency in each and every rehab that will cover your surprise costs. Usually you can spot the big stuff: roof, windows, HVAC ( if it looks bad, it probably is bad), foundation, driveway, etc. Always assume the plumbing is bad unless the house is nearly new. I am not a huge fan of home inspections before buying, but paying a plumber $200 to look at the sewer line with a camera is a good idea when buying an older vacant building.

    The problem with the TV shows and the real estate gurus is they want to gloss over all the numbers that eat into your profit. The article did not mention utilities, garbage pickup, building permits, occupancy permits, the cost of a dumpster for the rehab, all the crap fees the banks and title companies pile on, etc. etc. Of course you have commissions and other costs on both ends.

    Having said all that, you can make money flipping. The money is made on finding the right house at the right price. It does not make for glamorous TV or glamorous guru testimonials, but that’s the way its done.

    There are dozens of good books at your library, this web site or amazon. Cost about $20 each. Instead of watching tv and drinking beer, try reading a few books on flipping, rehabbing, landlording, etc. No book is perfect, that’s why you should read a bunch of them. You will soon get the idea.

    Go to your local REIA and try to get to know some folks that actually find, fix, and flip houses. They may let you tag along with them. Maybe try to partner with them to learn the business.

    Get going, you own your future!

    • I always consider closed comps the most optimistic view of the ARV (after repair value) because too many buyers overpay just like Mark in this article says he probably did.

  14. Carl M.

    I was fortunate to have a great mentor who taught me much of what I read here on BP. While nothing is guaranteed, if you do your due diligence, buy right and be conservative with your ARV and repair estimates, you should almost NEVER lose money. That was 11 years ago. Today we have apps like Deal Check that make the process so much easier and more exact. You still need to do your homework.

  15. Sounds like Mark got some EXPERIENCE! There are investors, sellers and contractors that will make you pay for jumping in the real estate investing arena without true support.

    Let’s just hope that Mark and other people like Mark don’t think they can practice some medicine from watching the doctor shows on TV as well.

    People need to give investing in real estate the respect it deserves that it does not happen overnight, next week, next month and from just watching a TV show or reading a book without any support and follow through.

  16. Richard Balsam

    What stands out for me- is the $10K electrician bill! If the entire house was new construction- it shouldn’t cost anywhere near that! Yes- they had to replace everything. Maybe cheaper to remove the bottom few feet of drywall in each room- to have easy access and a drywall company to replace all in one day. I’ve never had any sub charge anywhere near that! Yes- a newbie “mistake I guess…

    Here’s a “quick tip” as BP likes to say: Next time you get a huge surprise cost – see if you can break down into two vendors. For example: I use a licensed heating/air guy that also does house repairs ( had to ask around a lot!). Since he’s licensed, he must deal with electrical issues and gas piping all the time. He can legally rewire each room, with new junction boxes and run to the main panel. The Electrician would be needed to replace the entire panel and fuses. The first guy charges me $35/hour. How many hours to rewire the house? Probably 1-2-3 days for a single guy, with access to all the wires. Cost approx $750-$1000. The electrician to replace the panel? Not sure- I guess $2K-3K including materials? This cost should have been more like $4-5K including materials – if a smaller 1700-1900 sq ft house, including drywall repair ( but not painting!). Just my two cents…

  17. Scott Schultz

    This story was purley no experience and poor planning, what was he planning to make with only a $50K upside to do the work and get a profit out, My formula you have to get out what you put in, IE he put $45K in, so he better make $45K profit, especially rolling $135K purchase, Just a bad deal all around, kinda like when Toreck (not sure of the spelling) on Flip or flop says “its not bad just carpet and paint” always turns into high end kitchens and walls coming out, and structural, or permit issues. the Shows are a Joke.
    I have flipped 15 houses, and buying #16 right now.

  18. Fred K.

    This was a costly learning experience but also looks to me like Mark is a newbie and did not know anything about flipping. First mistake was the commission. Find an agent that will work with you on the commission. My agent gives part of the purchase commission back and charges a flat fee on the sale. We would have made up almost all the $5,000 Mark lost just on the commission. Second mistake is the $10,000 to rewire the house. Our electrician will rewire a house for around $2,000. Hope this has not turned Mark off to flipping and he will use this as a learning process to help him in the future.

  19. Roberto Caprio

    if only Mark really existed…this kind of posts is actually deceiving because it makes people believe that all they have to do is avoid these unbelievable mistakes and they will be well on their way to make tons of money. I mean, surely they are not going to give money to a stranger from Craigslist before he does any work, right? So, now that they know they belong to the “smart flipper” category, they are ready to invest profitably? Hmmm… maybe not, it takes A LOT more than just avoiding this basic mistakes to turn a profit.

  20. Matt Huber

    Replacing the wiring was a fantastically stupid decision. There is absolutely NOTHING wrong with aluminum wiring, in fact nearly all high voltage wiring is aluminum. The problem is the interface between aluminum wire and switches/outlets designed to work with copper wire where the difference in expansion between the Al [aluminum] and Cu [copper] (historically) loosened wires which sometimes resulted in fires. The problem is easily solved in one of two ways:
    1) buy Al/Cu (special aluminum to copper) connectors DESIGNED to handle the difference in expansion between Al and Cu – which is the main reason for the (historical) fires (which are now mostly fiction)
    2) buy special outlets and plugs from an electrical supply distributor which are designed to connect to aluminum wiring. You are not likely to find these specially designed switches/outlets at your run of the mill hardware store.

    The electrical contractor took Mark for a ride by replacing all the wire when he knew much cheaper solutions exist. Do a google search yourself and the top listings on the topic are 7 to 10 years old. If fires being caused by aluminum wires were such a big problem you’d see a lot more recent articles on the subject. The other clear indicator is being able to obtain insurance. If fires were such a huge risk, insurance companies would not insure. Sure some insurance companies may have concerns about aluminum, but they are in the minority. I bought, insured and sold a house with aluminum wiring and the insurance company didn’t even ask the question about what type of wiring existed. It was never a concern because the previous contractor had installed the proper Al/Cu interface connectors.

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