Watch the Fix and Flip Wholesale Shows on Television Just Don’t Believe Their Numbers, Time Frames to Complete the Rehabs and Their Repair Costs
Recently while surfing channels on my television I came across two real estate fix and flip shows that caught my attention. I watched each of these shows and as I watched it took all of my strength to not turn the channel in disgust. I couldn’t believe the incompetence of the people doing the shows. One of the shows was filmed in Orlando Florida and the other was filmed in Las Vegas.
I love a good comedy show as much as the next person but these shows were just too ridiculous to watch without feeling compelled to warn every unsuspecting and untrained investor not to believe what they see on these shows. Shows that never show any real facts and details about the properties they fix and flip. If you watch these types of shows be sure to take their numbers with a grain of salt and don’t try to replicate what is being shown before you make an offer to purchase any property.
The gurus who are doing these shows are always showing how easy it is to make big money being a wholesaler. I will say they could be somewhat correct but only if the investor has knowledge how to find the best deals, not just any house that needs repairs done to it. Does the investor know how to properly figure the repair costs? Does the investor accurately determine the numbers of each property that are based on the area the property is located in, the square footage of the property, the number of bedrooms and bathrooms, the amenities each property has such as a pool, a fireplace, a one or two car garage, a concrete or paved driveway and an updated electrical system adequate for a house that size with the amenities it has? Does the house have good curb appeal? Does the investor have sufficient credit and financing available to them already in place? These are a few of the key items every investor needs to look at before ever making an offer to buy any property.
When you watch the television wholesalers, be sure to take notice how all of them always estimate the repairs for each property incorrectly and the repairs always cost more than they figured. Notice how they talk in seminar numbers of each deal. Here is what I mean. At the end of the show they show they bought the property for $140,000, the repair costs will be $40,000, but because of unforeseen termite damage it took another $11,000 to cover the cost of this damage. They sell the property for $220,000 and show they made a profit of $29,000. This Is Not True. I did not hear one of the Guru Wholesalers talk about paying taxes on the profit they made. I didn’t hear them talk about making payments on the money they borrowed for the time they owned the property. I didn’t hear them talk about paying closing costs when they bought and sold the property. I didn’t hear them talk about the holding cost they paid during the time they owned the property, things like water, electric, garbage, lawn care, pool care or any other cost they had to pay during the time they owned the property.
I know I sound like a broken record and I don’t care if I do. I want all investors who read this article to not believe what they see or hear the Guru wholesalers say on television, it’s just entertainment. You have to do a much better job of finding and analyzing each property you are looking at before making your offer to purchase any property. You must know the numbers of every deal you do and make sure your numbers are correct as closely as possible, not like the Guru Wholesalers talk about and how much they say they make on every deal.
Do your homework on every property you are thinking about buying before making your offer to purchase. Never use Guru Wholesaler numbers like they use on their television shows. Like I said it’s just entertainment.
Until next month be sure to go to my website for your real estate investing information needs and be sure to listen to my podcasts “The Real Deal Podcast with Larry Harbolt” found on my website and iTunes. Be sure to check out my new digital course I am offering for only a short time I call the “Cash Flow Blueprint” for only $19.97. That’s right I’ve lost my mind, I’m selling this huge brain dump of information for far less than a few cups of Starbucks coffee. Click on this link http://www.cashflowguys.com/fasttrack and it will take you to this important information every real estate investor needs to know.
Good Luck and Happy Investing!