It's clearly a fake show
The production company is buying these house. If you think this couple if paying over $500K in cash for some of these house in hopes of making a profit you're out of your minds.
shareCould you elaborate?
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MovieChat Forums > Flip or Flop (2013) Discussion > It's clearly a fake show
Yo,
I agree, especially about their "profit", that does not mention any capital gains taxes. But that is what their seminars are for, as with numerous other flip shows that are produced to make $$$ from the seminars;
https://www.armandolive.com/?utm_campaign=4Q16_Philadelphia_PA_Encore&utm_source=AdWords&crm_source=173590000&utm_medium=cpa&utm_content=173590007&utm_term=Philadelphia_Encore_Flipping_Houses&market_id=3eb94e93-156a-e611-b0b4-000d3a100681&cover=98&new=1&gclid=CjwKEAjwsuK_BRDD9ISR1bawwUwSJACbOiixPtcBZ6tBKW4ZbJQ1QREesMuc0nvgOVaeCu8b629UZBoCEiPw_wcB
http://m.wtae.com/news/celebrity-house-flipping-seminar-stirs-concern/29664358
"...Florida resident Bob Morse hoped to earn a "substantial amount of money in a relatively short amount of time" -- and provide a more secure financial future for his family -- when he signed up for a seminar about flipping houses offered by Scott Yancey, known to millions as the star of the cable show "Flipping Vegas."
Instead, the experience left Morse so embittered that he demanded a refund of the more than $30,000 he said he spent for a year's worth of training he considered inadequate.
"I thought that I would have to sue," Morse, 58, told CBS MoneyWatch, adding that he still feels like he has been taken "to the cleaners and back." He recently had half his money refunded, he said, after filing complaints with the attorneys general of Florida and Utah and with the Federal Trade Commission..."
&
"...According to the BBB, the firm that puts on the El Moussas' seminars, Success Path Education, also does business under the name of Premiere Mentoring. The BBB says Premiere has recorded 159 complaints over the past three years, closing 13 of them during the past 12 months.
April Critchfield, chief marketing officer of Success Path, said the BBB's data are wrong, and she denied any link between the El Moussas and Premiere Mentoring. (Utah corporation records show that the businesses are both located at 6465 S 3000 E in Salt Lake City with different office suite numbers, according to Katherine R. Hutt, director of communications for the Council of Better Business Bureaus.) In an email to CBS MoneyWatch, Critchfield also identified herself as the marketing chief for a company called Advanced Real Estate Education, which the BBB also said is linked to Premiere Mentoring..."
Read more @
http://www.cbsnews.com/news/why-house-flipping-seminars-are-flopping-with-some-investors/
Search for more info, google "flip show seminars"
Be well !
Thanks to All Who Serve
I believe you don't have to pay any capital gains taxes if you reinvest the money in something else within a specified amount of time. For example, buying a house, flipping it, and using that money to buy another house. But if you buy a house, flip it and put the money in the bank, then you will incur capital gains taxes.
shareYou are correct. If you do a 1031 exchange by putting the money into another property, you do not pay those taxes.
shareHow do you ever make a profit if you always put it into the next house? What's the point of doing it if you can't pocket it?
shareThe part that seems fake is that they buy these houses in really low class neighborhoods. You see the conditions of houses and the neighborhood is pretty much like the house, lower middle class at best. They fix these houses up with over the top embellishment and accessories but I don't see how they can find anyone who will pay (or can afford) over $600,000 to live in the potentially dangerous neighborhoods.
shareBecause it's all nonsense. I just saw an episode where they claimed to have shelled out close to a million dollars cash for a home. Flippers must look at this nonsense and laugh themselves silly.
shareThey have stated in the past they borrow hard money to pay cash for the properties. Hard money is borrow from an investor at a high rate. Tarek said on one house he was paying 12%. I loan out at 10% in my area.
shareWow!
A friend of mine obtained a 30-year fixed rate mortgage for 4.5% interest here in South Florida a few years ago. Him and his wife barely had enough money for closing costs, so they opted paying a lower amount with higher interest.
Of course, they refinanced at around 3.75%, but they're still paying out of the wazoo and, on top of that, have a monthly $300.00 Homeowners Association payment.
They're looking to start a family, so I can understand why they did what they did. Luckily for them, they both work.
I think renting is a better option. They had to put so much work into their townhouse that they wound up raising their insurance costs by filing so many claims, even with a high deductible.
I feel bad for them, but they were well aware of what they were getting into beforehand, as pointed out by the Realtor, stating that it was sold as-is.
I often wonder how people flip houses for a living and still manage to make a profit. The property was on the market for three years. Whomever owned it barely made a financial gain, seeing as how they sold it for $20k more than what it was purchased for. I suppose they were anxious to get rid of it since they had to take a hit by settling for a lower amount than what they were originally asking for.
It seems like everybody in that area bailed on their mortgages because they couldn't afford an HOA fee on top of what they currently pay. I guess this is partly why gentrification exists.
BTW, sorry to hear about Tarek and Christina. I wonder if it's some sorta publicity stunt to increase ratings for their show.
This is why I avoid watching reality programs.
The price of real estate in California is silly expensive. My wife and I sold an 1100 square foot house that we owned here in Manchester NH back in 2005 for $165000.00. A house about 30 miles from San Francisco, that was almost identical with the same amount of land sold for $750000.00. So yes, I can see some of these as real prices.
shareof course there is a vast disparity of prices between the west coast and the East Coast. What I am talking about is just like any real estate market you cannot have a house in the ghetto, fix it up and sell it for top dollar like it is a high-end neighborhood. The neighborhoods they are buying houses in are working-class neighborhoods and the prices they are charging for the houses are upper middle class prices. No one in the working-class neighborhood would be able to qualify for a mortgage for the house they are trying to sell and no one in the upper-class neighborhood would want to live where that house was.
shareIf flipping houses is your main income, it's not capital gains, it's ordinary income. If you own the home for a year and a day then it's long term capital gains. I've been flipping houses for 13 years now, self employment taxes eat you up.
shareSelf employment is rewards and punishment.....lol
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