On HGTV’s show Flip or Flop, Tarek El Moussa and Christina El Moussa buy distressed properties (often foreclosures or short sales), renovate them, and attempt to sell them for a profit—a goal that sometimes pans out and sometimes doesn’t, as evidenced by the show’s name.
We recently sat down with Tarek El Moussa—who primarily flips homes in Orange County, California—to talk about trends in the luxury home market, what factors determine whether a project will be a success or a flop, and secrets everyone should know when flipping a house.
How did you get into flipping houses? What are the pros and cons?
Flipping houses was always a dream of mine when I first got into real estate. I believed that if someone else could do it, I could, too. So I found a partner, made $34,000 during my first deal, and never looked back. The pros are that it’s a great opportunity for making a profit and it’s an exciting business. The con is that if you aren’t educated about the best way to go about flipping a house, you can lose a lot of money.
What factors determine whether a project will be a success or a flop?
The lost important thing you need to do is make sure you are buying homes at the right price. If you don’t, you can lose a lot of money. High-end flips are riskier because they take longer, and the property loss is much greater than a low-end home.
What’s something nobody tells you about flipping a house that anyone who is thinking about trying their hand at it should know?
You must really know the local values, and you have to remodel the entire home with high-end materials and design. Low-end homes are much easier to come up with a value. When homes are custom, it’s more difficult to find a value . . . sometimes the high-end is apples and oranges.
In your mind, what defines a luxury home?
A luxury home is in the seven-figure range, but the actual property itself depends on location. A $2 million home in Yorba Linda is like an entry-level home in Newport Beach. Luxury homes typically include a beautiful yard and remodeled house—just a really attractive place.
What trends are you seeing in the luxury-home market, and what types of amenities are buyers looking for?
High-end trends are leaning toward more modern colors with a transitional feel. White, black, and gray with lots of stone, marble, and concrete tiles is a popular look. Newer-build or remodeled homes, open floor plans, large closets, smart home systems, bifold doors, and a beautifully landscaped yard are some of the amenities buyers are looking for.