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Reality shows tend to make real estate investing look like a piece of cake.
You buy a house, fix it up and sell it for a profit.
But what the shows don’t show you is how the deals get done. They conceal the difficulties investors have getting financing and problems that arise when the demolition starts.
“What happens on the reality shows is they’re focused on taking an ugly house and making it pretty,” said Lori Greymont, a real estate investor and creator of the reality show “Funding Faceoff.” “They don’t talk about why the person lost the house, how the investor funded the house and that they get a lot of products donated.”
Brad Holcman, senior director of nonfiction and alternative programming for A+E Networks, said when he got into reality real estate shows, he was adamant that everything he works on portrays the truth.
Holcman’s goal is for people who are in the industry to watch the shows and say, “This is real.”
“Most home shows result in victory at the end,” said Holcman, executive producer of “Triple Digit Flip,” “Zombie House Flipping” and “50/50 Flip.” “The talent has made all this money, everything is great and everything is perfect. But that doesn’t happen. It’s full of conflict, full of challenges — it’s a constant battle.”
“People go into real estate investment because they’ve been fans of real estate shows, but then they wake up to reality. They’re dealing with contractors and financiers. There are questions you have to ask, which are never asked on these shows.”
Keeping It Real
Holcman’s most recent creation is “24 Hour Flip,” which debuted in February. The show centers on a New Jersey couple who have disrupted the real estate market by creating a flipping process that allows them to renovate a home in just 24 hours.
“It’s unbelievably stressful, but they do it because they love it,” Holcman said. “It’s really how you produce and showcase it — less shine and more grit.”
Greymont’s “Funding Faceoff” show takes a page from the popular “Shark Tank” series where ambitious entrepreneurs present their business concepts to potential investors. “Funding Faceoff” gives entrepreneurs ranging from newbies to pros the opportunity to pitch their real estate deals to experienced investors.
The folks bringing potential funding deals face off against each other — they ask the show’s investors for a certain amount of money in exchange for a percentage of the profits.
Greymont says most reality shows don’t reveal the actual cost for some of the projects home flippers take on. For example, an investor might have a $30,000 budget but find that the project actually costs $130,000.
“It puts people who want to try it at risk because they have unrealistic expectations,” Greymont said.
Looking for a way to boost returns? Benzinga’s Real Estate Offering Screener has the latest private market investments with offerings available for both accredited and non-accredited investors.
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Image and article originally from www.benzinga.com. Read the original article here.