Flip This House Scandal: Reality TV Becomes a Flop (Part II)
June 15, 2007 by Maricel Ferrer-Custodio
Filed under Finance
Sam Leccima’s "Flip this House" scandal had not only deceived his investors, but also the thousands of viewers of his show. Scams like this gives some unknowing amateur real estate investors false hope on how to make a quick buck in real estate. In fact, a lot of people are interested in these type of shows not only because of the renovation ideas, but mainly because of the profitability factor. Let’s face it, anything that talks about earning money sells. Simply because majority of us wanted to earn a lot of money. They are preying on other people’s weaknesses.
Thus, it is important to expose scams like this. It is a reality check that not everything you see on TV is always true. If you need to make a judgment on your real estate investments, base it in your own criteria and not from what you saw on TV.
Other similar shows maybe genuine. It could be a good source of ideas. However, if you need to make a life changing decision, I recommend you investigate further. Remember, a lot of people already lost their money based on flashy advertisements, promises of huge returns and other various get rich quick schemes.
Flipping a property could possibly generate you a good return, but it’s not always that easy to do. Renovation is just part of the process of flipping a property. You have to take into account other important factors such as:
- Location
- Selling Price of the Property
- Statistics of Sold Prices in the Area
- Your Budget
- Your Timetable for Renovation
- Your Overall Plan for the Property
- Any Contingency Plans in Case the Selling Price Did Not Meet Your Expectations
- Cost of Money Involved
- and More
One good and equally infamous example of a flipping failure is Casey Serin; the would be real estate mogul behind "I am Facing Foreclosure". He originally planned to flip the properties he bought for a profit. However, things did not go as planned. The cost of renovating came out more than his estimates, interest payments ate most of his funds away and his properties did not sell for a profit. In fact even the bank lost $130,000 from one of the properties he bought.
To conclude, I’m not saying that flipping a property cannot give you a generous profit, but it’s not always a guarantee. All investments have risks involved. At the end of the day, it comes down to minimizing the risk to maximize profit.
Learn to be an educated investor. Don’t just trust anyone to manage your money for you. Learn the tricks of the trade so you can have a better judgment of where to invest your money. The more knowledgeable you are about investing in real estate, the less likely you will be fooled by scam artists.
Here are a list of other blogs which discussed the Sam Leccima: Flip This House Scandal,
Dale Russel’s Blog: Flip This House (He is the reporter that exposed Sam Leccima as a scam artist)
The Real Life Real Estate Blog
EKDay – Orlando Real Estate Blog
Anyone who watches a show like this and believes it’s just a quick way to get rich is no different than the people who buy the get rich or get beautiful or get thin fast products that are advertised everyday on TV and Radio stations across the country. It’s a shame that the networks are not required to take any of the blame when one of these shows or products proves deceptive. After all the networks want viewers to trust their news and even now political views, which most are so fast to give today.
People like this Sam guy are all over TV everyday so if you’re gonna lock him up, get an extra large cell because he will have lots of company. We need to realize that we can’t trust TV and radio to tell us how to think or how to invest. We live in a country where the object of the game has become..get rich no matter what it takes. We should never forget one simple rule. Buyer Beware.