Property Ladder TV show on TLC

[misosoup]

http://tlc.discovery.com/fansites/propertyladder/about.html

This show will be premiering in July, I think.  Do you think this will damage the market that we are working in?  OR do you see it as a positive.

I'm just starting to researach and am really excited to get started, but afraid this show will diminish the potential opportunities that out there.  

[prodempsey]

I really don't see how it damage the real estate investing market.  If anything it will add credibility to what we do.  Who knows, you might even learn something.  Sounds like a positive thing to me.

[misosoup]

I was thinking it might cause the market to become oversaturated.  But I totally see your point about making people more aware and legitimizing the business.

[L.A.Investor]

People, generally speaking, are risk averse. Numerous books, seminars, internet chat forums (like this one), are sprouting up everywhere.

Still, most people are scared to take that first step. I watched the program and it inspired me even more. I cheered when they shared the selling price, he most definitely earned it!

Take care,

Andy Gibbs

[Markw]

Was a cool show, though the property he bought wasn't what I'd call a rehab, more like updatting.  

Are updates really that important?  I wouldn't think very many people would let thier homes go that cheaply if they just need updating.  On the other hand updating a full home can be pretty expensive, and I would hazzard to guess you rarely get your money back from it.  A Silstone counter top with all new kraftmade kitchen will sit around $10,000, and thats not even with labor.

Then again I don't know the market there at all, seems like they may of "made it work" for tv purposes though.  

Never the less it was fun to watch.

[misosoup]

I enjoyed seeing it too.   It was a nice for my dh and I to watch and get a visual aspect of what can go into repairs.  One thing that showed us is you must must must have a plan when going in and know how what you are going to do when starting projects and definitely contract out what you don't know how to do.  I think that's common sense but it's easy to lose sight when you are just starting out and everything seems a bit overwhelming.

I"m thinking the updating was needed for the environment that the house was in (L.A, right?)  but I don't know the market either.

[NoMoneyDown]

I saw the show this past Saturday.  I lady in her 20's bought a 1/1 condo in Long Beach, CA for $253,000.  She thought it would need $10k of repairs, but it ended up with $12k.  She thought it would take 8 weeks to put back on the market, but it took 6-7 months.  She ended up marketing it for $320k and got multiple offers.  She finally settled on $340k.  The program then calculated her profit at dome ridiculous figure (I can't remember it).  They added $7,000 in mortgage payments, but didn't account for other holdings costs, buy costs, or sell costs.  I ran some quick calculations right after the show and figured she made something like $35k profit in reality, which still isn't bad, but then this was California - the 6-7 months she held the property probably boosted the appreciation a lot.  She then said she was going to use the money for a vacation and graduate school, which had me really scratching my head.   ???

[evergreen]

Yea, she probably made about 25k. If this was in another market that was not so hot, she loses money.

Still, not bad for the first time. The fact that she is not going to do any more puzzled me. You just made 25k (or whatever) for playing around in a condo while all the people around you went off to a job they hate.

I understand the graduate school though. That is a smart investment, BUT how about doing a couple more first then go? Keep that ball rolling.

Many people who are employees for a living have this uncanny knack of spending money when a good chunk comes their way instead of re-investing it and spending some later on. Why not wait til you have 50k then spend 25k if you must? At least you will still have 25k to work with. Sure beats $0 :D

I can't wait to see more of these shows. Pretty entertaining.

Remember folks, ALWAYS hire your contractors from the local bar.

[L.A.Investor]

I absolutely agree, I was amazed when she said she would be investing in grad school (though I believe education is very important).

She should find at least one more and continue to invest. It seems that she learned a thing or two and could better prepare for the next project.

[Markw]

"Many people who are employees for a living have this uncanny knack of spending money when a good chunk comes their way instead of re-investing it and spending some later on. "

LOL I built up 20k day trading stocks, then spent it all as a down payment on my house!  Guess thats just another investment though huh

[kdhastedt]

MarkW...

That is an investment in an appreciating asset rather than dumping money into a depreciating one (car, boat, timeshare, etc.)...

This is the "right answer".  The money is not spent, it is invested and can be taken back out again (resale, refi, HELOC, etc.) for future use!

Keith

[Dan732]

I wouldn't consider Graduate school a depreciating asset. In a way that is very smart thing to do, she would have less debt after college.

[evergreen]

Yes, a home is "good debt". So you did not waste your cash, you invested it and since you live there, it is even better. Your purchase gains in value.

A vacation does not. A car does not.

I can't tell you how many people I know that received a lump sum of cash either from their job or something else and their first thoughts were "oooo I can buy a new car or new furniture or new clothes."

Your first thoughts should be on how you can increase that cash so you can get some things you want later on and still keep the ball rolling. Buying a home should be one of the top things on that list.

As far as school goes, I am an educated person and believe that every dollar you spend in education returns itself many times over. It only becomes a bad investment when you don't respect it. My point was that she could postpone grad school for a semester or two and use that money to make even a little more. The end result is the education you want and cash in the bank (of any amount) to keep working for you.

Also, college is a whole lot easier to deal with when you are not worried about finances. If she plans to attend law school for example, she will appreciate the free time she has to spend in the law library.

Of course, for all we know, she is going to move in with mom and dad :D I was just stressing a point--always leave money to keep your options of making more open.

[kdhastedt]

I didn't mean to allude that investment in education was an investment in a depreciating asset.  My response was directly to MarkW's post about HIS investment in real estate, not about the "lady" in some show...

Keith

[Dan732]

evergreen, sometimes it is better to quit while you are ahead. The lady probably was worried that she had all this money tied into this condo and that the repairs were taking longer than expected. She probably realized she wasn't exactly cut out for it. She made money and she is going to use it to continue her education. She is a winner in my book. And all winners know when they won the race.