Flipping shows-think its really attracting people to invest?

Question

Ever since flip that house became known, I meet lots of people that never thought of investing now getting into it...or at least considering it. I'm not sure how many of them act on it, but still, is it generating more competition for yourselves on your properties? Or do you feel its more a "wow look at that, i can do that" and then nothing happens type of thing?

Just seems its introducing many people to the real estate game.....

Account Closed · Answer

These shows only seem to show successes. They never really go into the troubles. THere are a few episodes where people got into trouble on their rehabs.

I think those are more realistic. The problem with a few of these shows and the "GURU" informercials as a whole is they only sell the dream of getting rich quick.

This is work. This is a career.  If you want to work by yourself, for yourself, etc this is a path to go. I have been very happy doing what I do. But I see so many people see the one amazing deal on the infomercials and expect them all to be that way. Guess they don't understand "RESULTS NOT TYPICAL" or "RESULTS MAY VARY" in the fine print on the screen.

HA!

Account Closed · Answer

Thanks for the info.

A number of states have redemption rights when there is a foreclosure. That is one of the reasons why a lender will be open to a short sale. Any investor has to hold off spending money on a purchase if the old owner can redeem for the auction price. It is not specific to KY. KY might be worse than some.

I know some note investors who will only buy notes in trust deed states given the ability to foreclose without any redemption rights.

John Corey

Ryan Urban · Answer

Couldn't agree more.

Between the proliferation of both rehab/flip TV shows and "guru" infomercials, I suspect there are many who are getting into REI thinking they'll be able to buy that first yacht next month.

I was discussing this with my realtor.  She rolled her eyes and said, "if I'm contacted by another guy with no money, poor credit and a get rich quick scheme, I'm going to scream."

If I were to think cynically and selfishly ( :mrgreen: ), I'd look at the silver lining:  The probable cottage industry of "saving" these poor souls by taking their properties off their hands dirt cheap.

I guess we'll see...

...

Frank Adams · Answer

Yeah rehab702; I saw that one too! Perfect example of the old expression; "if you don't have a destination any place you end up is wrong"! No budget, no plan, did things backward. I thought sure they would ignore Kirsten's advice and rip out the kitchen cabinets.

I've never met anyone who's successfully doing this, who got the idea from a TV show, or for that matter who saw an infomercial and wrote away for the tapes before doing some research.

all cash

Richard Warren · Answer

Property Ladder is one show that will highlight failures.  I saw an episode this weekend where a rehab turned into a disaster because three clowns had no clue as to what they were doing.  Two guys bailed on the third because he was an idiot.  When the project was complete there were broker opinions estimating a sales price of $625k-650k  for a profit of over $100k but the idiot listed for 700k because that’s what he wanted.  The house went without offers for several months and he was forced to sell to an investor and walked away with a net profit of $1700.  So the show will feature losers.

8)

Connie Brzowski · Answer

Honestly, if my first exposure to flipping had been one of those icky shows, I'd have run the other way.... :crazed:

I haven't met a single person here that's been influenced positively. Perhaps because our area hasn't had the mega-appreciation of other areas ? Dunno...:cap:

Jennifer Karlen · Answer

The price paid at auction plus 10% interest per annum.

So, if you put in hardwood floors, redid the plumbing, fresh paint, new electrical, etc - make sure you get a big thank you from the guy buying it back at the original cost because you aren't getting any of that money back. ;)

Theres a lot of these little loopholes in Kentucky.  It pays to have competent representation down here, or you get burned pretty easily. :)

Account Closed · Answer

Malok,

Specific to the right of redemption in KY. What does the borrower who lost the property need to pay to get the property back? The price achieved at auction? Or are other costs rolled in?

John Corey

Jennifer Karlen · Answer

Whats sad is the persons that don't educate themselves before jumping in.

They watched it on TV - so they are good to go, right?

In Kentucky there is a 1 year right of redemption if a home is foreclosed and sold for less than 2/3 of its appraised value.

There are already horror stories coming out about persons losing tons of money because of their ignorance.

Richard Warren · Answer

Isn’t that the truth.  It is hard work and many of these wannabes fail in short order.

8)