What can Investors learn from HGTV?

What can Investors learn from HGTV?

How the real world compares to the TV shows

Photo by Nolan Issac on Unsplash

There are a ton of TV shows on HGTV and other outlets, including more and more streaming media, feeding the interest in real estate.

We all know that we need a place to live in. A place we can call home. Some even still believe in the old adage of the picket-fenced house on the hill.

Photo by Mr.Autthaporn Pradidpong on Unsplash

For those who live in places where the only option is to rent, the TV shows give us a glimpse into the process of changing a house. Are we all construction addicts?

Not really. I believe it’s more a matter of realizing, especially when sitting on the couch in a small overpriced apartment in a city, that it is much more realistic to find a house that is in bad shape and needs a bunch of TLC than being able to actually build a new house on a piece of land.

In many states, the system has become so regulated and requiring so much preparation, applications, permits, etc. that it appears unrealistic to build a house for a single-family. If you want new, you have to find a development and buy from that investment company or contractor.

Wikimedia Commons — Richard Dorrel

So, we have fallen in love with the idea of renovating something a little older and making it new and modern again. “Resurrection” comes to mind.

If you pay close attention to these TV shows, you will find that the initial budget that was estimated is often significantly exceeded — always with great reasons, especially by the designers. To make things easier for the viewers to accept there is often a change in the market or a motivated couple or a bidding war that leads to higher prices in the sale than originally anticipated. That allows for the team of renovators to come out ahead and move on to the next deal.

HGTV must have realized that that is not a very believable reality and has avoided even talking about the costs at all. For the pleasure of the viewer, it is so much nicer to see all the improvements, some of the unexpected struggles to go thru on the path to a property that always looks like it just came straight out of an architectural magazine.

Photo by Kelly Sikkema on Unsplash

Moved back to childhood dreams we think: Amazing — I want that! Where can I get that? They got that place for so cheap. I know I can afford that.

Ohh, hold on — it’s a TV show. Almost forgot.

Dreams are important and sometimes they can inspire us. They can turn into energy we can use to go after something. The shows are made for TV but for someone seriously looking to invest in real estate, what can the shows tell and teach us?

The teams that are portrayed in these shows are experienced (most of the time) in finding properties, estimating what the effort of change, also called “scope of work”, actually is, how much it will likely cost, etc.

Lesson #1 to be learned is that the selection and renovation of real estate properties should be left to experts. If you DIY it, you probably lose a bunch of shirts the first few times. Most people can’t survive that financially. So, don’t do it.

Lesson #2 to be learned is to always pay attention to the purpose of any action or activity. That does not just apply when renovating properties. In almost all the shows the purpose is to renovate a property to sell it for a profit or renovate it after someone else has already bought it with the goal to live in it. As an investor that is rarely the case, so be careful to draw comparisons.

Lesson #3. HGTV and others show us a lot about all the things that can go wrong and what goes into a successful renovation. We can hold some of what we see on TV against what we are being offered in the real world.

Finally, if you are like me, I try to find out what the best question is that one can ask when it comes to any particular issue or problem.

When it comes to the HGTV and other real estate shows, I believe one of the very best questions is: ”Who could I work with who has an inherent reason to do a great, quality, renovation for a fair price?”

Pixaby — 5890689 — free distribution

The answer I have found is a special type of turnkey provider. I call them the “all-inclusive turnkey company”.

Why are they so desirable for investors? They want what you want for the same or similar.

You want a property in a desirable location that would perform well when it is renovated — the all-inclusive turnkey company wants that too.

You want the renovation to be done in high quality and expeditiously  — the all-inclusive turnkey company wants that too. Otherwise, they can’t sell it to investors.

You want to have very little maintenance on the property after you bought it so you can maximize positive cash flow — the all-inclusive turnkey company wants that too. They mainly want it because they have to make and pay for the repairs that resulted from the renovation. That makes it a no brainer to pay close attention while renovating and only do everything once. I make sure my contracts provide at least a 1-year warranty on everything that was touched during the renovation.

You want to be happy with the property you bought and have tenants who don’t only pay on time each month but also see the property as their home — the all-inclusive turnkey company wants that too. The better the tenants they put into the property, the less work they have. And, oh, by the way, they get the property management fee each month, regardless if anything was to do for them. Naturally, if they don’t have any maintenance calls, happy tenants, and happy investors they basically collect the management fee for a very small admin task of creating a monthly report and sent it to you.

You want to know that your lender is happy because you make monthly mortgage and escrow payments each month — the all-inclusive turnkey company wants that too. You don’t want to pay those expenses out of pocket and the all-inclusive turnkey company does not want to deal with the complaints you will have if the tenants they chose to place in your property were unreliable, disrespectful and didn’t pay.

Photo by ActionVance on Unsplash

In summary — enjoy watching the TV shows and when you are interested to invest, find the all-inclusive turnkey company. I help people in my IWG system to do just that, and many more things that create passive income millionaires.