Tarek and Christina put their life savings on the line at a foreclosure auction, and buy a house that they've never been inside, for $275,000. And now it's the moment of truth, as they walk through the door for the first time and find the house is a disaster. The kitchen, bathrooms and backyard all need a complete overhaul! But there's no turning back because foreclosures are sold as-is. So they start work on the flip and the rehab budget skyrockets to over 50K. With the flipping business at stake, Tarek and Christina feel the pressure to get the house completed before the housing market shifts beneath their feet. And the thought of failure gives them the foreclosure heebie-jeebies. Will Tarek and Christina Flip or Flop?
Tarek and Christina have had their eyes on a short sale in Anaheim Hills for about a month, when suddenly it goes to foreclosure auction, so they jump on it for $430K. They arrive at the house for a walk through with their contractor and discover that the house has been vandalized! All the widows are broken, the hardwood floors are hammered, and there's graffiti and food all over the place! But worst of all, concrete was poured in the sinks, showers and toilets, destroying the plumbing in the house! Now their entire budget will be spent just fixing this damage, instead of doing the upgrades that would attract buyers. Will Tarek and Christina pull through this nightmare and flip this house? Or will this vandalized foreclosure sink their flipping business and make this a FLOP?
Tarek and Christina snoop a foreclosure in Yorba Linda, CA. After casing the property and looking through the windows, they're confident the house is in good shape. So they head to bid on the house at a foreclosure auction. During a high-voltage bidding war, Tarek and Christina spend $393K on the property, which is more than they planned. Tarek and Christina want to flip this house in 30 days, so they walk through their house with their contractor, Dan Messina. It has a very awkward layout, with the master bedroom located between the front door and the kitchen. But much worse, one of the bedrooms turns out to be an unpermitted loft conversion! They thought they were buying a 4-bedroom house, but it's actually a 3-bedroom house! If they have to market this house as a 3-bedroom, they will actually LOSE money and will have to write a check to sell the house. Are Tarek and Christina going to Flip or Flop?
When Tarek and Christina see a 4-bedroom house in Garden Grove coming up for auction at a super low starting bid of $250K, they convince an investor that this is a good, cheap property to buy and flip. Tarek and Christina head to a foreclosure auction and buy the house sight-unseen for $280K. They meet their contractor Dan Messina for a walkthrough and realize the house is a major money pit. There is no master bedroom, a kitchen that needs a complete remodel, and a backyard that needs a complete re-haul, which includes fixing the pool and pool house. With the construction bid at 80K, this is the most they've ever spent on a flip. And when their investor Pete De Best stops in for a visit during construction, he begins to lose faith in the project. With their investor breathing down their necks, this double trouble flip has Tarek and Christina surfing the brink of disaster. Will they Flip or Flop?
Tarek and Christina spot a gorgeous family home in an upscale neighborhood in Cypress, CA. They tour the house with their contractor, Izzy Battres, to see if they want make an offer, and are pleased to discover that the house has a large open floor plan, a downstairs bedroom (perfect for an older family member or a nanny), a bonus family room as well as a large designated office space upstairs. However, Izzy begins to point out troubling signs of water damage that cannot be thoroughly investigated until they own the house, because it will mean ripping into walls. But Tarek and Christina think a home like this could sell for over $700,000, so, even in light of their contractor's warnings, they decide the potential profit margins are worth the risk, and they get the house for $490,000. Construction begins and they quickly discover that the water leaks have created a severe case of black mold, and the rehab costs skyrocket. Will the costs of fixing this mess eat onto their profits, or will leaking pipes leave them underwater?
Tarek and Christiana spot an intriguing listing for a curbside auction for a foreclosed 1920's Spanish style house in Santa Ana, CA. This is a unique opportunity to actually walk through the house, before the bidding starts. Although it needs a complete overhaul it has some charming original architecture still in place that will add to its value. They decide to bid on the property and win the house for $208K, a good price considering comps in the area go up to $325K. Their contractor meets them at the house and finds more issues than Tarek and Christina originally spotted in their walk through. There is some structural damage to the foundation and roof leaks that could be massive projects and additional costs. Tarek and Christina worry these structural issues might blow their entire rehab budget. Will this Spanish style salvage be a profitable flip or a regrettable flop?
Tarek and Christina spot a large house in Ontario CA, going to auction for an opening bid 150K. But it's too far away to snoop and the auction starts in less than an hour. Based on comps, which are $240K-$260K, they take a leap of faith and head to the auction where they win the house for $180K. It's always nerve wracking to buy a house sight-unseen, but while walking through the house with their contractor, Dan Messina, it seems to be mostly cosmetic and can be done for 30K in 30 days. But after the work begins they find rotted wood, which leads to extensive termite damage. Will these termites destroy their budget to update the house? Will they be able to make the upgrades that will attract buyers? Or will they be forced to market this Inland Empire Cosmetic Nightmare as is.
Tarek and Christina get a lead on a bank-owned (REO) property that is a small 1920's craftsman bungalow in Whittier, CA. They are able to tour the house prior to making an offer, and discover it needs a complete overhaul. It may not be worth flipping. But there is a studio in the back that doesn't seem to be included in the square footage on the listing. If the studio is permitted, it would be a major selling point for potential owners, who might want to offset their mortgage with a renter. They check with the city and discover that it is in fact permitted. And the bank accepts their all cash offer of $182,000. They want to flip this house in 30 days so work begins right away. On Day 1 they discover that the lead paint on the house must be dealt with according to EPA standards at an unexpected cost of 12 thousand dollars! Day 2 and it's a broken water main, which once again destroys the budget! With their profit margin getting gouged, Tarek and Christina hold their breath to see if this bungalow gamble will Flip or Flop.
Tarek snoops a small four bedroom foreclosure with a pool in La Mirada as Christina heads to the public foreclosure auction where the house is on the docket. Tarek calls Christina, and from his evaluation of the house, Christina bids and wins the house for $210,000, a smokin' deal! However, as soon as Tarek and Christina open the door, it's clear that this dilapidated house needs a full rehab from tip to tail. It's a disgusting, smelly, confusing mess of rooms, with piles of trash, and graffiti everywhere. Tarek seriously underestimated the home's rehab costs, as initial bids from contractors come in at $50,000 and up. The cost alone for cleaning up this flop house is expensive, but when they begin to discover a bevy of unpermitted construction, Tarek and Christina are forced to demo unpermitted additions and spend money to decrease their square footage! With a skyrocketing budget and a rehab plan, which actually might be de-valuing the house, will this flop house Flip Or Flop?
Tarek and Christina check out a short sale that's listed at $214,900, discounted a full 50% from the $430K currently owed on the house! Short sales can be great opportunities for house flippers because banks would rather take a loss on a house than foreclosing and having to sell it themselves. This house is a large 4 bedroom with a pool that appears to just need a facelift, and with comps in the area between $230,000 and $280,000, Tarek and Christina make an offer, which is accepted, for $200,000. They get a $30,000 bid from their contractor to update the kitchen, bathrooms, master closet and the pool, bringing them right to the lower end of their comps. But when they realize a back addition is unpermitted, the added costs may erase their profits, potentially leaving the facelift they planned on giving the house covered with red ink!
Tarek and Christina decide to go big and invest in a Real Estate Owned, or banked owned, high-end hilltop home with a gorgeous view. They check their bank statements and realize that even after maxing out their credit cards, the only way they can cover the costs of rehab is to get Tarek's mother to invest by taking out a loan against her home equity. So, if they lose on this house, it will affect the whole family. Banking on the home's beautiful view, Tarek and Christina spend 20 thousand of their $50,000 rehab budget on landscaping, however, after they notice a crack in the foundation slab of the house, they realize that the home might be sinking down the hill along with their profits! With literally everything, and then some, invested, will this flip with a view have Tarek and his family sitting pretty, or tumbling down the hill towards bankruptcy?
After some intensive research on comps, Tarek and Christina find a promising 5 bedroom, 3 bath, house to flip in a family neighborhood of Bellflower, CA. When they tour the home with their contractor, Izzy, Tarek and Christina are thrilled to find a newly renovated kitchen and a dining room that just needs a coat of paint, however, their hopes, that the rest of the house will also be in turn-key condition, are quickly dashed when they discover that the upstairs master bathroom is covered in floor to ceiling mold. Considering the kitchen is in such good condition, Tarek and Christina decide that dealing with the mold remediation shouldn't ruin their remodel budget, and negotiate with the bank to secure the house for $385,000. But after they hire a mold inspector to run some tests, they discover they have toxic mold on their hands, which, not only is more expensive to treat than was expected, but will also take longer to fix. As they open up the walls to deal with the mold, they also find fire damage throughout the attic, and extensive termite damage throughout the house. With further delays and costs, all bets are off, as Tarek and Christina scramble to get this home renovated and on the market. Will cleaning up this moldy mess make them Flip or Flop?
Tarek and Christina follow up on a large family home in Fullerton, CA that is listed for $389,000. They tour the house with their contractor and discover that it will need extensive rehab. Not only will the interior need a full remodel, but the whole roof will also need to be replaced, multiple balconies will need to rebuilt from scratch, and the crumbling driveway needs to be entirely re-poured. However, it might be worth it because Tarek thinks a house this nice, in this area, will sell over $600,000, giving them potentially huge profit margins. But, the 1960's floor plan could seriously hinder its sale price. So Tarek and Christina check out a neighboring home with the identical floor plan that has been recently updated. They like it so much that they decide to replicate the house by opening up their kitchen and master bathroom walls. If they can modernize this mid-century home, it will appeal to a higher end buyer, but the scale of this remodel is pricey. So they cannot afford any unforeseen delays especially because they have to cover $600 a month in HOA fees themselves, until they can finish the rehab and sell the house. Will keeping up with the Joneses make them Flip or Flop?
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