What If the Flip Doesn't Flip?

Posted by Dave Fratello on Sunday, September 16th, 2007 at 6:02am.

Those home-remodeling TV shows are facing new challenges with a changed RE market. The LA Times already noted this month that the "flipper" genre of cable shows is being retooled:
Producers and some cable executives said they were a little nervous when the housing market first showed signs of trouble.... [An ad exec] wondered how "real" these shows would feel if the home-flippers on TV continued to reap gigantic profits at a time when home prices fell nationwide and "for sale" signs lingered for months in neighborhoods...
And there's this problem: What if the "flip" (a.k.a., "house") subjected to months-long documentary treatment doesn't even go to market before filming ends?

That happened to 3619 Blanche, a Tree Section home featured by TLC's "Flip That House" (not to be confused with A&E's "Flip This House"), in an episode aired this week. (Hat tip to the reader who brought this to MBC's attention.)

The ep, titled, "David," for the name of the flipper, details the interior-remodeling process (kitchen, Master, LR and a bath) for the home, which David purchased in July 2006 for $1.476m. The home is mid-sized, at 4br/2ba, 1950 sq. ft. The 8,700 sq. ft. lot is a nice plus.

No one ever mentions the location: Corner of Rosecrans & Blanche, two fairly busy streets.

David orders some great work. The smallish Master happens to be next to an unneeded second garage. Adios, garage, hola, bonus square footage.

The kitchen is tired, and a wall unnecessarily blocks it from the rest of the living space. Adios, wall. Hola, granite-and-stainless.

After demo and reconstruction, everything is updated nicely, and we're almost ready to flip. The realtor makes a dramatic entry and proclaims the home to be worth $2.2m now. After expenses, David stands to make $500k (pre-tax).

But we don't see a flip happen. You see, David's wife had a baby. (Who could've predicted?) They decided to move in. Apparently, this had become the better of their two homes, so they ditched the other one.

This turn of events disrupts the drama set out at the beginning. David had 2 months to get the work done. He was driving the contractors, and they were pushing themselves. As the show concluded, the need to re-do the landscaping loomed prominently. We were left hanging.

Did they finish? Did they sell?

Or maybe this was just a home-remodeler's story, not a flipper's story. They just called the wrong show.

3619 Blanche hasn't hit the market yet. You have the sense that it will, but there are these complications:
  • Do they really want to join the stagnant $2m+ market in the Trees? (29 listings now, extremely little sales activity.)
  • Does the wife with the new baby really want to move?
  • Where are they gonna go?
  • Are they ready to invest their (currently taxable) proceeds from a "flip" into a possibly depreciating new purchase?
  • Should they wait 2 years to avoid the tax hit?
Turns out, the "reality" shows are finding these sorts of questions interesting, too. As we see in the LAT:
"We feel compelled to tell both sides of the story. We're going to show viewers what's really happening in the market," said Carlos Ortiz, the executive producer in charge of "Flip That House." His show often revisits flippers from previous episodes to provide viewers with "recaps," such as when the sales price falls short of initial projections.

"When people lose money, we are going to show them losing money," Ortiz said. "We're not going to spin everything so there are rainbows and bunnies at the end of every show."
Hey, there could well be "rainbows and bunnies" over at Blanche some day soon.

All of a sudden, we care (dern you, TV!).

Intriguingly, 3619 Blanche has already been on TV. It was previously featured on an HGTV garden-remodeling show.

This provides an answer to the question: "How can I gin up interest in a home at the corner of two busy streets?" Answer: Call in the cable guys.
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