The Reality of Flipping a House...And Why I Caution Investors Who Want

Shows like Flip or Flop and Flipping Vegas have ushered in a wave of house flippers in recent years. These reality TV staples paint a glamorous picture of the process, often with big payouts at the end, that have people from all walks of life jumping on the flipping bandwagon.

But we all know reality TV isn’t really real, right?

In truth, these programs show a very small part of what it’s like to be a house flipper, glossing over much of the grunt work and other boring aspects of flipping. Yes, I said boring. There is a lot of time spent in front of the computer, inputting figures into spreadsheets and financial software, among other similarly boring tasks.

For beginning investors, it’s always a risky business getting involved in house flipping, especially when their only experiences with it come from watching a reality TV show. Why? Because what viewers are being sold is not the reality. Here are some of the untruths that these programs showcase

• Stunning makeovers - What do all of these shows have in common? High end finishes that look amazing but just aren’t practical for the average flipper. I’m talking quartz countertops and toe kick lighting in the kitchen, massive spa-like showers, and gorgeous hardwoods throughout. The reality? Unless you’re catering to a very specific segment of high end buyers, you’d be throwing your money away to do all that.
• Quick process - Most of these shows also zoom through the whole process, selecting, buying, renovating, and selling a house in a matter of weeks. In real life, it can take months to flip a house from start to finish. Finding and purchasing a house alone can be a weeks- or months-long process. These TV shows never highlight the intense property scouting or number-crunching that goes on, or the closing process. The renovation also gets the same glossed-over treatment. Sure, you may see some of the problems that are uncovered, like bad electrical or plumbing, but these are usually included solely for dramatic effect. The reality of dealing with major problems and how much of a setback they can cause is rarely shown. And in case you weren’t aware, selling a flipped house doesn't usually happen as quickly as it does on TV, either.
• Inflated profits - Speaking of selling, it’s not unusual to see some of our favorite reality stars make tens of thousands (or more!) on their flips. I hate to break it to you, but this probably isn’t going to be the case for you. Many flippers consider themselves lucky to net 10k or 20k after all is said and done. Those six-figure payoffs sure do look good on TV, though.
• Buyers by the truckload - One final untruth that these programs tend to showcase is the steady stream of buyers interested in a property. On television, an open house will attract 100 people; in real life, you get 5. On TV, there are 5 offers that turn into a bidding war; in real life, you get a single offer after being on the market for 5 weeks. Obviously these numbers may not be 100% accurate, but you get my point.

What does all of this add up to? In my opinion, it makes a pretty good argument for why an investor should think very, very carefully before flipping a house. If your house-flipping knowledge consists only of what you’ve seen on HGTV and DIY Network, then you will probably be in for a rude awakening, because the programs on these channels are simply unrealistic.

As an alternative, turnkey investing offers long-term profits with much less risk. No, you’re not going to get a huge check for thousands of dollars all at once. But you’re also not going to have to deal with months of searching, dealing with contractors, making home improvement decisions, and then hoping like crazy for a buyer soon because that monthly mortgage is really starting to hurt. What you will get, however, is a property that has everything already done and the potential for immediate, steady income.