1. Market research matters. In all fairness, someone scouring spreadsheets and pulling up data online doesn’t make for particularly good entertainment, so it’s no surprise most TV shows leave this component out. However, a significant portion of any project’s success is completed before the rehabber even sets foot on a property or picks up a hammer. A successful rehabber invests time in researching which cities and neighborhoods are best, then explores the needs and potential of several properties before digging in.
2. Not all restorations provide ROI. We all love seeing a gorgeous house with wow-factor and curb appeal. Potential buyers love it too. It’s the little touches a rehabber adds that create an emotional connection with buyers, so they picture themselves living in it and are willing to pay more for the home. However, there are many things that will not result in profits. According to MoneyWise, adding a backyard patio or sunroom will return less than half your investment to you. Adding an upscale master suite or bath will only give you 55-56% of your investment back. A full kitchen remodel will, in all likelihood, only give you 59% returns at best. These are things you’ll commonly see done in TV shows, but they don’t typically result in real-world profits.
3. Finding financing isn’t always straightforward when you’re not a celeb. It’s pretty rare for TV shows to even talk about financing. That may be because it rarely adds entertainment value or it could be because it’s just not a concern for them. In some cases, the network funds the flips, while in others, the stars have income from the show, so they can either pay for the projects outright or can use their cash flows to demonstrate they have the bandwidth to pay a conventional mortgage. In the real world, many rehabbers use fix and flip loans in Arizona, which are relatively easy to get, even if you don’t have celebrity income, a network funding you, or great credit.
Even though TV shows don’t usually cover the legwork done before a project starts, it’s things like fix and flip loans in Arizona and crunching the numbers associated with ROI and market conditions hat play a major role in the outcome of a project. If you’re just getting into the biz, you’ll need to do some homework to ensure your rehab project is profitable.
One thing shows get right, however, is that it takes a team to make things happen. Shows like to highlight the unique dynamics of each relationship because it adds drama and entertainment value. In some cases, the disputes between parties keeps viewers tuned in, while the dynamics of a happy couple seeing to a joint project gives the empowering feeling that anyone can achieve the same. The latter is more true to life, but the real team expands beyond those seen on screen. There are always contractors, subcontractors, brokers, lenders of fix and flip loans in Arizona, and more involved, so if you’re getting into the biz, building your dream team is a good place to start.
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.