Saturday, June 02, 2007

Flipping Houses..Fraud?

A news article presented that the star of "flip this house" is a fraud. The star Sam Leccina did not own the homes he "fixed, flipped, and sold" and he did not actually repair the homes as it appeared on the show. A&E has already pulled the show/reruns and wiped any mention of the show from their website.

Also the star did not really makes the profits he was supposedly reporting. In fact Leccina does not even posses a real estate license anymore. All the "so-called" profits were fake.

I know most personal finance bloggers will laugh at the show. But many normal people actually watched the show and believed it was so easy to make money. They actually bought into flipping houses for a profit.

I know this because my mom is one of those people. She watches shows like this and thinks "wow, real estate is a sure thing." Sigh. I hate these shows because they give people foolish hope. They only show the positive aspects and none of the negative ones. Also now they aren't real to boot!

My parents were thinking of buying a third home. They believed a $400k 1 bd condo, which would generate $1600/month rent (this is what they are paying), with a $300/month condo fee is a good deal. What is the return on the investment? Well I think it's around 3%. Great, but my mom only see "I'll make $1k/month to bring home, off a $400k investment." Arrgh.

I'm so glad this show is being shown for a fraud. These shows prey on the uneducated and greedy. People thinking it's so easy to make money, rather than just save and building a nest egg slowly. But that wouldn't be a fun show. That would be average joes, living average lives.


Anonymous said...

Dear Living,
Thank you so much for alerting us to this. My husband believed this show. I can't wait to tell him it was a fraud!

Terri said...

It's not the show "Flip this House" that's being shown as a fraud, just this particular individual. The originator of the show "Trademark" is a very profitable real estate company in South Carolina and while they're no longer doing "Flip this House" they are still going strong with "Real Deal" and the private business.

Living Almost Large said...

Right this particular developer. But I hear A&E erased any mention of the man and show connection. I think it publicisized too much the "fast/easy" money aspect of real estate.

It made average people think it's was the way to riches.