Property Ladder - New show on TLC

[Bearcata]

Pasadena 15 miles south of LA.

Rene De La Paza - realtor and investor

Flip: a foreclosed condo unit in a nice older 84 unit building. Looks as if the owner was trying to renovate and then ledt the country and her teenage kids in the unit. The kids lived in the unit with their dogs and a couple of friends but after 3 months of non payment of the mortgage the bank forclosed. Being in the biz Rene got the scope and paid $275,000 for the unit. It is 900 sf, 1 bedroom and 1 bath. Budget of $8,000 - $10,000 and 3 weeks to renovate.

Rene spends the first 2 days demoing all by himself and is a bit pissed at the mess the kids left, lots of dog poop. He gets rid of the closet organizer temporary kitchen cabinents. The previous owner had already installed a new tub and toilet, a really nice stainless steel stove and dishwasher. Unfortunately Rene loses his contractor but manages to get another one and with another helper and himself they manage to get the work done and Rene learns how to tile. Rene has recessed lighting installed in the living room, kitchen and dining area. New dark custom cabinents in the kitchen, a neutral tile, 18 inches, in the kitchen, dining area and bathroom floor. He put in 12 in tile for the shower surround and had it put in all the way to the ceiling. Nice touch, very classy. He also puts in granite counter tops that pick up on the tile color, a stainless steel sink very nicely done kitchen not too much. He carpets the living room and bedroom. Tiles the balcony/patio which in an older building covers the cracks in the concrete and adds the flavor as if the balcony is an extension of the unit. He also puts in a ceiling fan with a light in the patio ceiling and adds dark (like the kitchen cabinents) bamboo blinds to add some privacy. Very nice touch. He also add tile to the fireplace and puts in a new tile hearth again echoing the neutral tones he has used in the tile in the kitchen and bathroom. I really like the new vanity he added to the bathroom, it has storage space and looks expensive and the new mirror. He took out the old inserted side medicine cabinent but let the drywall area so a future owner can put in a medicine cabinet or simple use it to store some small items. Rene did not add any overhead lighting to the master bedroom and the huge wallin closet is bare but the realtor suggests that Rene give the new owner a credit to they can install a closet organizer of their choice.

There was a problem with the plumbing as they dumped the excess grout from tiling down the bathroom drain and there was a backup and the downstairs bathroom was leaking and the owner came up to complain. They ended up cleaning the drain and there was a lot of hair stuck in the drain and they cleaning is all out and that really helped with the drainage. Rene also put in a great Rain shower head and a handheld shower head.

Rene was told that he could price the condo between $350,000 and $360,000 but he listed it at $345,000 for a quick sale and a projected profit of $60,000. Gee, I am amazed, a flipper who is not greedy and understands the market and the concept of a quick sale so as to not pay additional holding costs.

I really like what Rene did, he updated and did not overdo but the place looked great and very modern.

[Google]

 

[Land Pirate]

Re: Johnny Mac

What I found most interesting about Johnny Mac's tale was not that he was a Realtor (most Realtors are clueless about permits, it would not surprise me at all that he didn't know how to obtain a permit), but that he bought the property for $420,000 (approx.) not the $350,000 reported on the show. Oh wait he didn't actually buy the property, the property is titled in the name of one of the Brokers in his Real Estate company. And the property is still listed for sale (by his Broker). I didn't do the orignal research on that myself (but I did confirm the information), I just took that information from another board.

But I did reserach 4 or 5 properties myself from season II of property ladder. There were significant differences in all the story lines (properties that never sold, or were sold to relatives in a type of shell game) that the producers could have easily uncovered with a minimum of research. The producers of the show do no research, they just allow the participants to report any story they want, so everyone looks like they many a killing on paper.

[Marlena_M]

Originally Posted by Bearcata

Pasadena 15 miles south of LA.

Rene De La Paza - realtor and investor

{snip}
I really like what Rene did, he updated and did not overdo but the place looked great and very modern.

I totally agree. He did all the right things starting with getting his own hands dirty, choosing colors/styles that would have broad appeal and never panicking throughout. I liked the upgrades... he modernized without being over the top. One of the most low-key but seemingly realistic flips.

[Bearcata]

3 pals, Josh, Byron and Silas; who have been appraising houses for the last 3 yrs decide to quit their day jobs and start flipping. They buy a house in a ritzy suburb of Fairburn for $415,000. 3,862 sf, 5 bedrooms, 4 bathrooms. The budget is $65,000 and the timeline is 8wks. They plan to list the house for $700,000 and a potential profit of $230,000. Kirsten ask them about their plans and jobs. They have none. No jobs (means no money) + no plan = disaster. According to Kirsten this is a basic cosmetic flip. New paint, carpet, new landscaping, update all the lighting fixtures, update the kitchen with new appliances and counters, get rid of the dated wallpaper, refinish the wood floors, and out quick with a nice profit. The boys wanted to demo the kitchen, are gutting the master bathroom, it has a mauve tub and put in a manroom in the unfinished basement. Kirsten manages to talk them out of demoing the kitchen and just putting in new counters and appliances. There is also the problem of the listing price as the ave house in Fairburn is selling for $630,000 and they want $700,000. Ah,,, greed lifting its head.

The problem with the boys is that they have the budget in there heads and do not figure it out until wk 6 and realize they are $15,000 over budget and still not finished.

Josh the leader in all this is a major disaster area. He decides to use a sledgehammer to demo the tile in the master bathroom and punches a hole through the subflooring, which reveals a rotten subfloor. Josh is told by the contractor doing the basement that the wiring down there is bad and needs to be redone. He ignores the advice, does not tell his partners and when his partners find out and have the wiring redone the drywall in the basement has to all be redone, doubling the costs. The communication between this team is horrible. The hardwood floors are redone to a nice dark stain but Josh walks on it while still wet and ruins the floors that have to be redone and does not tell his partners until much later. This is basicially the last straw for Byron, Josh's so what attitude has doubled the cost on 3 big items and extended their timeline. He is also blaming them for not supervising the workers better and bascially thinks they are wimps cause by wk 4 both Byron and Silas unquit their jobs. Josh says in a lot of his confessionals that the other two are not taking this seriously enought but again he does not either. He does not lead by example. Kirsten visits during wk 6 and is worried. By wk 7 Byron and Silas have worked out off the project and Josh is fed up and leaves for 3 or 4 wks but decides to finish it off using his savings and maxing out his credit cards.

Final stats:

Timeline: 12 weeks
budget: $85,000
carrying costs:$15,000 (mortgage was $5,000 per month)
total: $100,000

Josh also bought his partners out but no numbers are given.

List price: $700,000
potential profits: $185,000

The house looks great until one of the realtors notes that alot of the details are not finished, both brass and aluminum fixtures in some of the bathrooms, some of the outlets are not screwed on properly, not all the light fixtures and fans were updated.

Realtors list at:
1: $659,900
2: $655,000
3: $625,000

Even Kirsten is worried cause there are 18 houses on sale in that developement all listed for less. The house sits on the market for 4 wks before Josh lowers the price to $675,000. Finally after 10 wks Josh manages to unload the house to an investor and makes a profit of $1,700. OUCH!!!
Way to go Josh. All the investor has to do is finish what you should have started put the house on the market at $630,000 or less and can walk about with the $100,000 that you wanted.

[Bearcata]

Ah, another Flip That House to balance the disasters that are currently running on Property Ladder.

Nashville must be having a real building boom according to this show. Chip has bought a 1,700 sf , 2 bedroom, 2 bath home in a transition neighborhood. The idea is to update the property and still make it affordable for a first time home owner. On the 'flip' side the mortagage payments don't kill the flipper either. Chris buys the house for $85,000 and has a budget of $15,000 and a timeline of 4 wks. Initially Chris has a contractor, decides to use his brother instead and does alot of the work himself. In this case he has some construction experience and keeps track of his budget and does not go overboard on the renovations. Both baths need to be gutted, especially the master as it has rotted floor joists. He also removes the wall separating the living room from the dining room. The closet in the dining room makes me think that it could have been a third bedroom at one point and that the original living room was a shared living room dining area.

During demo day I am always surprised when removing/breaking mirrors I almost never see people wearing safety glasses. I am just waiting for a splinter of glass to end up in someones eye. I also don't get tossing stuff out the window and breaking it up, that is just more pieces to pick up and deposit in the trash.

Around week 3 Chris has problems; he has totaled his truck and needs to buy a new one to transport supplies. He ends up going past his deadline and builds a new deck on the back of the house. He had to clean up all the trash on the concrete pad in back. He cut down a huge holly by the side of the house and puts in a new flower bed and plants in front of the house. The house has a small porch and he removed the metal supports, which were all rusted but he only replaced them with 2 4 by 4 posts and the scale looks awful. The supports look as if they can barely hold up the porch roof. I was as Home Depot and they have prefabed colums there for about 83.00 each the scale was much better then what he did. I know you have to watch costs but those posts to me are deal breakers as they look ugly, unfinished and lack any curb appeal, in fact bring down the curb appeal.

I like that Chris brought a neutral modern paint palette to the house. He was smart in the kitchen and did not over build just refreshed it and added value by adding a utility closet for a washer and dryer. The new bathrooms look really good and updated. While I loved the dark stain that Chris used on the hardwood floors I like how the realtor mentioned in a smaller home you have to be careful about the shade of stain you use as going too dark can make the home seem smaller. The realtor suggests that Chris list the house in the mid $140,000's. Chris lists the house at $145,000. He did go over budget from $15,000 to $22,000. He stands to make a potential profit of $37,500.

I think Chris was smart in what he purchased, and how much he spent on it and that is a big factor in flipping successfully. I like his advice at the end where he says you don't always budget for the little things such as baseboard the little things add up and can break your budget if you are not carefull. Interesting to note that Chris said one of the hardest things to do on the job is to get up every morning and get there at 7 or 8 in the morning.

This show/episode is such a wonderful constrast to the previous Property Ladder episode. I don't know if the two production companies coordinate it or TLC does but to me these 2 shows do show the perils and pitfalls of flipping as well as the successes.

[canadian_angel]

Originally Posted by Bearcata

Finally after 10 wks Josh manages to unload the house to an investor and makes a profit of $1,700. OUCH!!!
Way to go Josh. All the investor has to do is finish what you should have started put the house on the market at $630,000 or less and can walk about with the $100,000 that you wanted.

I missed the tail end of this episode and I'm not at all surprised that's all he got, but at the same time I cannot believe that's all he got in profit. Totally messed up from the beginning.

[Bearcata]

Originally Posted by canadian_angel

I missed the tail end of this episode and I'm not at all surprised that's all he got, but at the same time I cannot believe that's all he got in profit. Totally messed up from the beginning.

Josh used his saving and maxed out his credit cards and bought out his partners, the investor had him by the balls. How many more $5,000 mortgage payments could he possible do. Also we don't know if he had his own house and what other bills he had. From the way these guys operated I don't think they went into this deal with much back up funds. I think the rule is have 6 months of living expenses put away when you start a new business. This was basically a cosmetic flip. If they had not done the man room in the basement and just concentrated on updated the kitchen and bathroom, paint, new carpet, refinish the floors and new light fixtures they definitely would have been out of the house in 4 wks. These guys were their own worst enemies.

BTW I absolutely HATED the faux finish on the kitchen cabinents and they also did it in the master bedroom. It looked simply HORRIBLE.

[Marlena_M]

Originally Posted by Bearcata

3 pals, Josh, Byron and Silas; who have been appraising houses for the last 3 yrs decide to quit their day jobs and start flipping. They buy a house in a ritzy suburb of Fairburn for $415,000. 3,862 sf, 5 bedrooms, 4 bathrooms. The budget is $65,000 and the timeline is 8wks. They plan to list the house for $700,000 and a potential profit of $230,000. Kirsten ask them about their plans and jobs. They have none. No jobs (means no money) + no plan = disaster.

{snip}

The house sits on the market for 4 wks before Josh lowers the price to $675,000. Finally after 10 wks Josh manages to unload the house to an investor and makes a profit of $1,700. OUCH!!!
Way to go Josh. All the investor has to do is finish what you should have started put the house on the market at $630,000 or less and can walk about with the $100,000 that you wanted.

This was one of the best WHAT NOT TO DO episodes. I still can't get over how utterly stupid all three of these guys are. Nothing written down on paper... no agreement on what changes to make... no tradesman experience... no common sense... no income and no budget. True buffoons! I wasn't surprised when Byron and Silas just bailed out. I mean, Josh was their biggest problem and there was no way to to rein him in at all. Everything Josh touched just turned into a turdball. Everything. And in the end, he was G-R-E-E-D-Y. I don't understand why these folks feel they have to make $100k profit and anything else is an insult. I mean, honestly I'd be happy to make $10k profit for a couple months work... and a whole lotta hands-on experience to boot!

I wish all these guys had done was... 1) refinish the hardwood floor 2) install granite countertops and new appliacnes 3) finish the basement 4) recarpet & paint 5) update the master bathroom 6) update light fixtures. The distressed kitchen cabinets were incredibly hideous and to ALSO use them in the horribly re-designed master bathroom turned a hideous choice into an heinous one. And they thought that crap appealed to a woman? OH PUH-LEEZE!!! It was revolting.

[Bearcata]

Originally Posted by Marlena_M

This was one of the best WHAT NOT TO DO episodes. I still can't get over how utterly stupid all three of these guys are. Nothing written down on paper... no agreement on what changes to make... no tradesman experience... no common sense... no income and no budget. True buffoons! I wasn't surprised when Byron and Silas just bailed out. I mean, Josh was their biggest problem and there was no way to to rein him in at all. Everything Josh touched just turned into a turdball. Everything. And in the end, he was G-R-E-E-D-Y. I don't understand why these folks feel they have to make $100k profit and anything else is an insult. I mean, honestly I'd be happy to make $10k profit for a couple months work... and a whole lotta hands-on experience to boot!

I wish all these guys had done was... 1) refinish the hardwood floor 2) install granite countertops and new appliacnes 3) finish the basement 4) recarpet & paint 5) update the master bathroom 6) update light fixtures. The distressed kitchen cabinets were incredibly hideous and to ALSO use them in the horribly re-designed master bathroom turned a hideous choice into an heinous one. And they thought that crap appealed to a woman? OH PUH-LEEZE!!! It was revolting.

For a first time flip they should have just done the cosmetic stuff and update the master bath (maybe add multiple shower heads or add a steam bath feature) and leave the basement alone, as Josh indicates that's is where most of their money went. If they were more experienced, then go ahead and do the basement. All of this was a very doable 8 to 10 wk flip if these guys were organized, had a plan and made a TO DO LIST.

I am really amazed that Kirsten did not comment on the hideous cabinents.

[David Shanahan]

Hello All,

Watch our TV episode of TLC’s Property Ladder - Million Dollar Buddies - on Saturday, Sept. 29th at 8:00 pm.

I have a website where I documented the entire Flip and the Filming of the episode. If you want to get the inside scoop check it out.

www (dot) davidshanahan (dot) com

Feel free to comment or send me an email if you have any questions.

Thanks,

David Shanahan