Flip This House - A Fraud?

http://biz.yahoo.com/ap/070601/house_flipper_investigation.html?.v=1

(Or at least, the episodes featuring the Atlanta group seem questionable…)

Now authorities and legal filings claim that Leccima’s true passion was a series of scams that included faking the home renovations shown on the cable TV show and claiming to have sold houses he never owned.

WAGA-TV in Atlanta, which first aired the claims against Leccima, has shown footage from inside one of the homes, which had mismatched wooden floors and unpainted patched walls that were out of the view of TV cameras on “Flip This House.”

McGee said she attended what was billed as a wrap party at one home. But when the party was shown on “Flip This House,” it was presented as an open house at which someone expresses interest in buying the property.

I don’t think I saw any episodes with this guy. I watched a few episodes from the first season, with Trademark Properties, and got turned off by the San Antonio group in the second season. I think this Atlanta group was from later in the second season.

Ugh. These shows are just unwatchable for the idiots you know they spawn.

Even worse than this one is the - My house is worth what? (or whatever) where people get their houses appraised by some half-wit so they can “borrow” against the supposed equity. Each bit ends with people jumping up and down thanking the appraiser for the imaginary value of their houses.

These shows just feed a stupid mentality, I hope A&E gets sued.

Chet

Yep. I’ve only seen one or two with this guy. He didn’t seem much different from the other head guys, but his brother the site manager did not inspire confidence.

Trademark properties, the Ginger and Richard show, has a new show on a different network called The Real Deal

My wife is addicted to these shows. She got started watching the original one with Trademark Properties (a legitimate business in Charleston) and then when they moved to the other network to create Real Deal she started watching the San Antonio crew on Flip This House.

I have to admit, a lot of what they do is pretty impressive. But it is very misleading, as the prices they quote for getting work done are obviously steeply discounted either because the contractors work regularly with the investors or because they know that being on TV will be good for business. I’ve seen them put $20,000 into a renovations that would cost the average homeowner nearly twice that on their own. Then, when the project is done, they often don’t show the SOLD value of the home, only the “projected profit” based off an asking price that they haven’t got an actual offer on yet. Some of those homes were in neighborhoods where I can’t imagine the average home value being anywhere near the asking price for the renovated home.

Still, they are interesting shows. My favorite so far was when the San Antonio guy got burned buying a house without going inside first. He got in the next day to discover that the house was filled wall-to-wall with cats, rats, roaches, feces and decaying filth. The sewer lines were busted, rot and mold was everywhere, the place was basically a complete disaster. He still flipped it though, but it cost like $30,000 more than he originally planned.

Is house flipping more or less profitable with the higher income rates?

Tromik, I don’t understand your question. What do you mean by “the higher income rates”?