Saturday, May 02, 2009

Reality TV Shows about Homes

Being sick and home from work forced me to watch daytime TV. Rather than poison my brain with Tyra or Maury episodes, I read a lot and watched some home shows since we're house hunting now. A&E, TLC, and HGTV really went overboard at the peak of the housing bubble with glamourizing the idea of flipping by producing multiple shows focused around selling and buying homes. Some focused on just selling a house. Some focused on purchasing a property. Some focused on random, inexperienced retards trying to buy a home, fix it up and flip it for a huge profit. Not a 10% or so return, which would still be a victory, but a 50-100% profit. As the bubble burst, the"Flip This House" idea focused on 'companies' and experienced flippers to show you that you need to be a professional to do this. All the while, they split the random flippers into a new show called "Property Ladder". The only real change was in creating a new show to suck you in and somehow create a group called professionals. Most of the time, these professionals have only been flipping during the bubble run up. What type of pro are they when they only worked in an amazing bubble environment? There are a few types of people that fit into these shows like those childhood round block in round hole, triangle block in triangle hole toys. The shows either set a narrative for you to cheer for or root against the 'star' of the show.

For sellers....

1. The out of touch - These folks have lived in a home for years and not done anything to it. These folks might be completely averse to anything stylish. These people think their home is worth 100K more than it is. This type is entertaining and not bad to watch.

2. The life event "forced" us to sell people - Something happens to this family or person and they now must sell. I'd even go further and drill down to "guy gets married and his wife hates the house". There are dozens of episodes of the selling focused homes that show these couples. These men are spineless and walk away from good equity and a home that fits their needs to then leverage up with a new bigger home. This happens when families have their first baby too. They have 1 child and then have to leave their 3 bedroom home for a 4 bedroom home. Ridiculous. In these examples, you just want to tell them "Remodel". Start saving for the kid's college fees rather than get that 1 extra bedroom.


For buyers...

1. The first time buyer with unrealistic expectations - These property virgins (a show title) want a 5 br, 3 bath huge dream home for 100K less than list price. They hate every single thing that is slightly off from their desires. Usually, they have no down payment yet act like total dicks to everyone. They are stone walls when suggestions are offered.

2. The greedy reachers - These buyers are approved for a 300K mortgage and they use the full amount or finagle financing to go beyond it. These people stretch their budget beyond limits just for an extra 150 sq ft. These people go beyond their budget if there is a seperate unit that they could potentially rent out for income. When you see that separate unit, you don't know who the heck would ever rent it. They have nothing to put down, and probably use NINJA loans.

3. The couple that needs space - This couple is either living with their parents, have a down payment saved, or works with the realtor on finding a good fit. This is usually a newlywed couple or a family with a 2nd ro 3rd child. A life event has forced them to move, and once you see their current residence, you totally understand. The newlyweds living with their parents after the wedding are a common type for the buyer focused shows.
4. The idiots who can't imagine the home without the current furniture - You don't get the tacky furniture included. Why do these people fail to use their imaginations? Why do they need staging to persuade them into a home?
For the flippers....

1. Real estate developers with a long track record - The original season of Flip This House. The Charleston team. They quickly left the scene and were replaced by losers. The founder grew up in poverity and slowly built his company. They ended up filing a lawsuit versus A&E and won $4 mil. A savvy thing they did was pick up properties that amateurs had tried to make work but wanted out. On other shows, you see the random pro who has been in the RE game for years who does a side project from their main real estate job. They are smooth, use other professionals for design and remodeling input, and stick tight to budgets. A good thing about their shows is that they show you the need for a plan, a need for using established contractors, and a need for realistic expectations. They show how expensive fixing up a house can be.

2a. Amateur Fliptards - These are the cousins of day traders during the stock bubble. These are the losers who tried to make a quick buck in a bubble market. These people work day jobs and think all it takes is a bank loan and some work to pull in a 50% profit in 6 weeks. They have unrealistic expectations, have no clue about the market they are in, have no clue about the business, and are greedy SOBs. They view this as a get rich quick scam, and are part of the reason we're fucked now financially. They don't listen to advice. They 'oversee' a lot of work. They go for the homerun with each swing. You want to see them fail.

2b. Amateur Fliptards with Peronsalities - A friendly and funny version of 2a. Another difference is they usually listen to advice or others input. They still are part of the reason we're screwed. I do cheer for these people, but only to make small profits or break even so they learn a lesson and never try it again.

3. Fraudsters that get A&E in Trouble - Seriously. Once again, when reality isn't reality. The Atlanta stuff was horrible as it was outright fiction created to make the impression the guy made money flippin' homes. The San Antonio team is another staged looking reality team that has a bad history with lawsuits, scroll through here for details. Montelongo's story is he had no money, credit, experience, yet in 5 years built a flipping empire. Wait: he only made a flipping empire when he borrowed money during the credit deluge that was the last 5 years and flipped homes in the greatest American housing bubble? Yet, he still filed for bankruptcy and is now selling ebooks and online seminars for home flipping and gaming the foreclosure process. In effect, he uses the show to sell himself (the Donald Trump-Robert Kiyosaki model). His empire sounds hollow. This reviewer looks at his ebook and finds it stinky (but he does give thumbs up to the book from Kirsten of Property Ladder). I dislike this guy, I dislike his attitude towards everyone, I dislike the Atlanta team, and I dislike the New Haven team. No, this is not American ingenuity and can do spirit. These are make a quick buck schemers and parasites.

These shows did feed into the psychology of "everyone must buy a home". Dr Housing bubble once had a blog post on this idea, but I cannot find it since he upgraded to his new and improved site. I cannot find his old-old stuff. It was priceless. I give Property Ladder credit for showing the failures as well as success stories. It would have been great to show those as well during the bubble. Instead, we saw every idiotic gamble taken by an amateur rewarded with a profit. Real Estate investment is a valid sector. Sadly, the housing bubble made a lot of amateurs run into this field and screw a lot of people with a structure that should not have become a frou frou commodity or asset. I caution people from going into this business because the landscape is an absolute wasteland right now with a lot of uncertainty, and secondly, the worst case scenario is you become these people....

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