We have been without TV for over 12 years now, by our choice. Who has time to invest in real estate and learn great new things when you're parked in front of the box? However, we recently bought Sky Angel and have been watching a few things for some fun. Today, I watched a show about what we do for a full-time living -- flipping houses. I won't mention the name of the program, but I would like to make some comments about what I saw.

The Flipper on the show bought the subject property in Phoenix. I don't know the time frame of this purchase to know what the particular market in Phoenix was like at that time. This man paid $216,000 for the property. He planned to spend $15,000 for renovations. As he planned to gut the kitchen and add on an addition, I knew this figure was low, but he soon learned that.

Craig worked for 3 months full time on this project. His brother, a general contractor, helped him for about a month of that time. They replaced all of the flooring in the house, even though the living room wood flooring was nearly new. Craig wanted to have uniform Terra Cotta tile throughout. (Just a quick note here: never replace good hardwood flooring because it doesn't match your color scheme. Go for neutral, leave the decorating to the new buyer and their taste). They also replaced many doors, windows and fixtures. They totally redid the kitchen including new cabinets and appliances.

A lot of time and money was spent outside on landscaping. Craig also turned the carport into a two-car garage, which added excellent curb appeal.

This was a much more extensive remodel than we normally undertake. Quite a bit of what they did was not truly necessary and only a rookie would have wasted the money and time. All of these changes did look great when they were done.

In the end, Craig ended up spending $24,000 on the remodel. He never mentioned any labor cost so I am assuming that was not counted in the total cost. Labor is our number one largest expense and that is only what we pay the contractors. We don't count any personal labor that we put in the project.

At this point in the show, I am enjoying watching the program and seeing others do what we do for a living. My problem came near the end when they were calculating Craig's expenses and possibility for profit.

The info we have now is this:

House $216,000

Remodel Costs $24,000

Total Cost $240,000

They had a real estate agent come out and give them a professional assessment of what the house would be worth. He told Craig that he could list the house for $299,000. The first thought I had was that he paid too much for the house. Never, ever, start a remodel without a firm idea of what the finished value will be. All other numbers work from there. They ended the show with Craig being excited over his $59,000 (quote) "potential profit". This is dishonest showmanship at it's finest (worst?).

According to dictionary.com, the #1 definition for potential is:

1. possible, as opposed to actual

Be sure to read Part 2 of this article. There I break down the ACTUAL expenses for this property and what his ACTUAL profit probably was. Stay tuned...