Viewership abounds for house flipping TV shows these days, begging the question for real estate investors whether watching them could be helpful or harmful to their investing endeavors. You're about to discover an inside look at how viewing these flipping houses reality shows can impact investors (as well as those who are interested in investing). You'll find out the pros (if any), the cons, and the things to be very aware of when trying to glean insight on flipping houses from what you see on TV. You may even learn a little more about "reality" television than you wanted to know. Most importantly, I'll answer the question of whether or not house flipping tv shows are helpful for investors to watch.
Entertainment vs Education
These shows are produced to entertain, not to educate and you should watch these shows purely for entertainment rather than to be educated on how to actually flip houses profitably. As you're about to read, what makes for good television doesn't always make for intelligent and productive real estate investing.
House Flipping TV shows primarily focus on the actual rehabbing of properties; the process of turning distressed houses into a beautiful homes. In a single episode, the vast majority of the camera time is spent with the fixing up of the property, dealing with the contractors and all the drama that hopefully comes along with it. But in the real world of real estate investing, the less time you spend dealing with rehabbing, and the more time you spend finding great deals, negotiating great deals, reducing expenses through creativity and then exiting the deal to the right buyer or tenant, the more money you will make. Rehabbing houses is actually a minor part of a successful real estate investor's time, not the majority.
Only Ugly Houses
Flipping Houses shows highlight ugly houses and their subsequent transformation. The awful looking "before" at the beginning followed by the gorgeous looking "after" at the end make for nice bookends in a TV episode. But what about all the pretty houses that smart investors like myself buy and resell and make huge profits on without ever having a dramatic before and after? There is a ton of investing money made on pretty deals too but that wouldn't make for good television.
Watching all the sledge hammer demolition and other significant renovations that are performed on house flipping tv shows can motivate an investor to rip out, tear down, demolish and remove parts of a house. This is in direct contrast oftentimes to what successful investors do, which includes NOT doing any major work but instead, performing cosmetic fix ups such as new carpet and a fresh coat of paint. A common storyline you'll see played out in the real world is an over-zealous newbie investor, fresh off of watching a house flipping show episode, taking a sledge hammer to a perfectly good wall and destroying it so that a completely new floor plan configuration can be built. In the end, they lose money on the deal because they over renovated. A good rule of thumb in flipping houses is that if you find yourself with a sledgehammer in your hand, you're probably about to make a mistake.
What you see on TV may not tell the whole story in regards to the final profit numbers. As in the case of one show whereby a blogger determined that the only way the flipper could have broken even was if the materials were donated in exchange for mentioning the actual manufacturer names on the show. And in general, reality TV is not always reality. It's television and things are changed and adjusted to make the show more entertaining. So you have to take the profit numbers that are shown with a grain of salt.
Collecting Fix Up Ideas
Some may protest that at the very least, one can collect fix up ideas by watching such programs. You won't get nearly as good of ideas on paint colors, textures, materials, and the like from watching a show filmed in a different market than your own. Instead, take a drive over to a local builder's model home and study the materials they used to finish that property. There is far more education inherent in a builder's locally built home than anything you will watch on TV.
Studies have shown that your brain is more active while sleeping than when watching television. This effect TV has on your brain can therefore reduce your ability to discern truth from fiction (what I call the signal from noise). That is even further amplified when you are tired, such as late at night. So you have to be even more cognizant of the potential to accept false information when watching TV, especially when you are tired.
"You're Just Jealous"
Some might skeptically be thinking, "You're just jealous Phil because you don't have your own show." Well, I have indeed been contacted by several production companies and casting directors over the years in regards to being a part of, or the star of, a reality tv real estate show. But thus far, we have not been able to find a fit due to the fact that what I do (wisely invest in real estate for maximum rewards and minimal risks) does not typically make for good television. My "before" and "after" pictures of my deals aren't impressive. I don't have any drama with my team. In fact, putting a camera on me everyday as I invest wouldn't yield much entertainment value at all. The only shred of potential drama in my investing would come from motivated sellers but they don't want to be on camera, showing the whole nation their distressed decision to sell their house to me. So as of the writing of this article, there hasn't been a show concept that would be entertaining for viewers that films what I do everyday.
House Flipping TV Shows are produced for entertainment purposes and there is little regard given to educating viewers on how to flip houses productively. In fact, if you are, or plan to become, a real estate investor, you would probably be better off finding some other programming to entertain you because inadvertently, you may be influenced by what you watch and begin to make poor investing decisions. That's may take on the matter, what's yours?