Property Ladder

General Real Estate Investing
1

Anyone catch the new episodes of “Property Ladder” this weekend?

You could see the “softer California market” catching up to these yahoos…

Keith

2

So, will the producers …

(a) stick with the soft Cali market, and “go with the flow”, or

(b) go to another area of the country that IS appreciating, or

(c) decide to cancel the show?

;D

3

Cancel?

I hope NOT! I love this show. It makes me so infuriated that I can’t help but watch! I love/hate that these nitwits do a horrible job and the producers pass it off as though they made all this money. Furthermore, what is most commonly overlooked on the show is how much MORE money they could have made if they did not screw up so much.

Another beneficial byproduct for not canceling the show is that it may inappropriately inspire others (my future competition) to get involved in rehabbing without much thought. This alone is worth the public service it does for the rest of us.

4

I hope they don’t cancel the show. I think they will move to another location as long as the REAL ESTATE EXPERT is willing to go or they find another. It’s fun to watch and I think Kirsten’s advice is well worth listening to and can be applied in almost every situation any other rehabber has done. Although I haven’t rehabbed MY own properties yet or at least nothing major, I have done it for others and her advice is ON THE BUTTON in my opinion. She really focuses on getting the best return on your investment where these people on Property Ladder are doing work that THEY want done as if they were going to move into it.

Well you live and you learn. That’s life.

5

What I’d LOVE to see:

(a) Joe Bag O’Doughnutz take a real shellacking and NOT get bailed out by unfathomable appreciation or mommy/daddy.

(b) An episode where someone actually listens to Kirsten, and takes her advice to see what they really could have done.

How can you go into a major rehab with:

  • No plans…no blueprints, no conceptual drawings, no new floorplans drawn on a paper towel??

  • No money? None, zilch, nada, nyet??

  • No plan for more money?

  • No discernable skills?

  • No common sense

…and still make money. In a thin market, you’d get destroyed.

My wife made a good point…I’d hate to be the buyer and then find out all of the crap work and shortcuts after I bought!

Keith

6

I vaguely recall them doing two episodes in Texas (both outside Houston, I believe). I know the one show ended with the owners STILL holding the property and stressing about how they could unload it and just break even. The other I can’t recall what happened, but I think the two-woman partnership barely made a profit. Those were probably the two most “realistic” episodes I saw. Interesting how they were both outside the state of Cali.

7

The one show this weekend had a California guy that cut every corner that he could because time was running out, the work wasn’t done, there was no money, a mortgage payment was due…yadda, yadda…he finally sold the house after umpteen weeks but, after he paid his parents back and paid a 3% real estate fee, he barely broke even…

Some of these folks are clueless as to what major renovation will cost, what the effects of removing load-bearing support are, etc. In one episode, Kirsten listed all of the things they were going to do and it was going to cost $50K, she said “Good luck with that”…I laughed!

Keith

8

Well the most recent show was a perfect learning case for all beginners.

  1. Get estimates on the work, even if you don’t plan on using them, you have a better idea of budget. Get this done before you close on buying the house.

  2. Have the financing lined up before you buy your house. Talk to Private Lenders, Hard Money Lenders and Traditional Mtg people. Go through thre pre-approval process before you find a property so you know what you can afford.

  3. Know how to get out before you get in!! I can’t say that enough. You should have multiple exit strategies as a possibility.

  4. Education about the market is priceless. You really do need to do your homework in advance. Had he listed it at the right price initially, he could have saved 3 months of mortgage payments.

9

I saw the show in Houston. That is where I am. In the first 5 minutes of the show, my wife and I both said to each other at the same time he has a bum deal. There is no appreciation in Houston. The market moves up about as fast as inflation 3%. You have to get your equity buying below market and fixing it up and selling at market. When I saw him pay retail for a house and put amenities in it, I knew he was sunk. The house was too pretty to be below market and I knew then there was no money in it.

I just closed on a house that has an after repair value of $127k, I bought it for $90k it needed a kitchen updating, and some holes in the walls. It was not much work (about $6k) but no one would buy it because I was ugly. I put the sign and flyers out Friday for $125k and we started working on it this weekend and people were asking for it all weekend. They see a $2k discount for a perfect house, and they wanted it, but if I priced it at $130k there would be no interest at all.