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annuinThere are a couple of shows on channels like TLC that I like to watch that involve home renovation etc. Part of me just can't wait until we own our own place and we can do whatever the hell we want with it.
One of the shows is called Property Ladder. In this show they follow someone who is going to "flip" a property. What this means is that the person has bought a house, and with a set renovation budget and a deadline of a couple of weeks, will renovate the house and try to sell it at a profit of several tens of thousands of dollars, and hopefully for 100K or more in profit.
I've watched two full episodes so far, and both have been cases worthy of![[livejournal.com profile]](https://www.dreamwidth.org/img/external/lj-community.gif)
mock_the_stupid. First time "flippers" who obviously didn't do their homework. One bought a house and then lived to regret the fact that she hadn't had it checked out by a building inspector, because the entire wall behind the kitchen sink was rotten and needed replacing. The other also lived to regret that decision too, as her home from the 1940s apparantly still had wiring and plumbing worthy of that era, which had rotted through and needed replacing, and also meant that there was a gas leak somewhere in the wall as well. Which they realised after they'd remodeled most of the kitchen and installed new cabinetry and backsplashes etc. Then they also suffer from trying to impose their own style on the house, rather than a style which makes it optimal for selling. Neither had DIY experience, which also didn't help, and both decided to piss off and go on a 1 week vacation mid-way through the renovation, leaving the contractors to putter around at will. Not smart... you need to keep on top of these things. The first woman also had a great habit of not arriving on site until noon or so.
Usually there's an expert who's been flipping houses for over a decade, who is also the host for the show. At the beginning of the project she meets with the homeowner and asks them what their plans are, their budget and their timeline, and she gives them pointers about what are and aren't good ideas. Of course aforementioned people ignored several of the pointers that she gave, and lived to regret it. The expert also checks up on them periodically during the project.
The thing that struck me about the most recent case was that this woman had randomly selected a renovation budget of $50,000 (for a property she'd bought for $750K and wanted to flip for $980K) but she hadn't actually sat down to think about what things cost and what the things she wanted to do cost. And if you've ever looked at the price of kitchen and bathroom fixtures and tiles, you'll realise that things are pricey, and it all adds up really fast. Her timeline wasn't too unreasonable, 4 weeks. These timelines are also things that you want to stick to, because due to the way these properties are often financed mortgage payments are steep. Woman #2's was $5600/month.
But of course poor planning, no idea about the cost of things, no DIY experience, not checking out the building before purchase and not checking out the contractors that she hired all bit her on the ass. She blew her budget by more than $50,000 and I think closer to $100,000, and her timeline by about 20 weeks.
Verily I laughed.
Also, they had various real estate agents come in and price the property before she had her open house. Most of them appraised it for anywhere between 900-950K, so she was also pricing it much steeper than it was really worth. This resulted in no bids after the open house, and I think she had to drop the price after that. The only thing that annoyed me was that they didn't actually tell you how much the place sold for at the end, but I get the feeling that she probably didn't make any money on the sale, and if anything lost money. At least woman #1 from the earlier episode sold her house for a profit.
Sometimes people's stupidity is very amusing.
I will say that the entire concept of "flipping" is one I find interesting, and maybe in the future it'd be something to try a hand at, but there is no way that I'd go into something like that without researching properly and doing the math and all that stuff. With the amount of money involved, it's just so foolish not to, and I don't get that people can just blithly walk into situations like that.
One of the shows is called Property Ladder. In this show they follow someone who is going to "flip" a property. What this means is that the person has bought a house, and with a set renovation budget and a deadline of a couple of weeks, will renovate the house and try to sell it at a profit of several tens of thousands of dollars, and hopefully for 100K or more in profit.
I've watched two full episodes so far, and both have been cases worthy of
mock_the_stupid. First time "flippers" who obviously didn't do their homework. One bought a house and then lived to regret the fact that she hadn't had it checked out by a building inspector, because the entire wall behind the kitchen sink was rotten and needed replacing. The other also lived to regret that decision too, as her home from the 1940s apparantly still had wiring and plumbing worthy of that era, which had rotted through and needed replacing, and also meant that there was a gas leak somewhere in the wall as well. Which they realised after they'd remodeled most of the kitchen and installed new cabinetry and backsplashes etc. Then they also suffer from trying to impose their own style on the house, rather than a style which makes it optimal for selling. Neither had DIY experience, which also didn't help, and both decided to piss off and go on a 1 week vacation mid-way through the renovation, leaving the contractors to putter around at will. Not smart... you need to keep on top of these things. The first woman also had a great habit of not arriving on site until noon or so.Usually there's an expert who's been flipping houses for over a decade, who is also the host for the show. At the beginning of the project she meets with the homeowner and asks them what their plans are, their budget and their timeline, and she gives them pointers about what are and aren't good ideas. Of course aforementioned people ignored several of the pointers that she gave, and lived to regret it. The expert also checks up on them periodically during the project.
The thing that struck me about the most recent case was that this woman had randomly selected a renovation budget of $50,000 (for a property she'd bought for $750K and wanted to flip for $980K) but she hadn't actually sat down to think about what things cost and what the things she wanted to do cost. And if you've ever looked at the price of kitchen and bathroom fixtures and tiles, you'll realise that things are pricey, and it all adds up really fast. Her timeline wasn't too unreasonable, 4 weeks. These timelines are also things that you want to stick to, because due to the way these properties are often financed mortgage payments are steep. Woman #2's was $5600/month.
But of course poor planning, no idea about the cost of things, no DIY experience, not checking out the building before purchase and not checking out the contractors that she hired all bit her on the ass. She blew her budget by more than $50,000 and I think closer to $100,000, and her timeline by about 20 weeks.
Verily I laughed.
Also, they had various real estate agents come in and price the property before she had her open house. Most of them appraised it for anywhere between 900-950K, so she was also pricing it much steeper than it was really worth. This resulted in no bids after the open house, and I think she had to drop the price after that. The only thing that annoyed me was that they didn't actually tell you how much the place sold for at the end, but I get the feeling that she probably didn't make any money on the sale, and if anything lost money. At least woman #1 from the earlier episode sold her house for a profit.
Sometimes people's stupidity is very amusing.
I will say that the entire concept of "flipping" is one I find interesting, and maybe in the future it'd be something to try a hand at, but there is no way that I'd go into something like that without researching properly and doing the math and all that stuff. With the amount of money involved, it's just so foolish not to, and I don't get that people can just blithly walk into situations like that.
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Date: 2005-11-11 04:54 am (UTC)If you watch the show you do see that by the end the owners really have done a nice job with the place with custom kitchens, sleek appliances and swanky tiles and all that stuff, not just cheap crap being sold off for way more than it's worth.
To buy and renovate a house without proper research is just plain stupid.
Oh yeah. This weekend there was a show where the guy had a $75,000 budget for renovations, then they found out there was no foundation, most of the wood was termite riddled, the plumbing was ancient and needed replacing, there was some mystery hole in the ground that needed council approval to fill and the roof was supported by 1-by-2's instead of 2-by-4's... plus he wanted to bust out some exterior walls and put on some extensions. The expert at the beginning asked him if he knew how extensions would affect his budget, and he said he didn't know. The stuff with the rotten wood/plumbing/foundation etc. were all problems that cropped up later, even though he had an inspector check it out. Obviously the inspector wasn't worth his salt.
Then he had an incompetent contractor for the first 18 weeks (which was the estimated timeline he'd set.
When all was said and done he'd spent 9 months working on the house, and his budget had ballooned to $245,000. Lucky for him he sold the house for about 200,000 more than he had originally planned (though after all the incurred extra expenses he'd upped the sale price as well).
It really is like watching a train wreck, and the lessons once again are that you need to do your homework, both about the property and the people you hire.
I guess there's some sadistic glee in watching people screw up so badly. On tv.