If you've ever caught an episode of HGTV's Flip or Flop, you've most likely learned a thing or two about which features help sell a house from Christina and Tarek El Moussa. But one of our favorite things about the show is how upfront the couple is about their difficult journey to becoming house flippers. Each episode kicks off by explaining that Christina and Tarek, both former real estate brokers, started flipping houses when the housing market crashed in 2008—they pretty much lost everything and had to work their way back up to be successful again.
By now Christina and Tarek have become pros at navigating Southern California's tricky real estate. We often see them attend fast-paced auctions on the show, at which they strategically battle it out with other investors to buy a house for the best price for returning a profit.
Starcasm recently did some digging to answer one of the most-asked questions about the show: Are these real estate actions real or staged?
During a Q&A with Talk Irvine in 2013, Tarek answered any doubts you may have, claiming that what you see on TV is indeed real. Here was his response:
Real estate auctions where we buy are real. I must have cashiers checks to buy cash (I lost a $20,000 check once that was a nightmare)!! I started a new business about eight months ago buying rentals. I have purchased 11 so far with creative financing. I buy them with cash then I get a blanket loan (one loan) against five properties at a time at 10 percent interest at 65 percent Ltv (loan-to-value ration). Even with the high rate, I cash flow because I only buy really good deals. Have I lost, no I have not although I have been close a few times when I was new to flipping which was very scary. All I do all day everyday is study and buy real estate. I am starting to learn more about construction. The good thing is my construction team is good and honest and one contractor Battres Construction runs all my jobs. It takes a good team to be successful. It took years to put my teams together.
While critics have questioned the show's finances, from how the couple pays for renovations to their seemly large profits, it appears that Christina and Tarek have done their best to be as transparent as possible. Tarek also revealed that he started this business in 2008 with the help of an investor who now receives half of the profit from each flip. "I didn't start with a lot of money, I proved myself and grew a business based on my business plan and track record," he said. "All the profits you see on show are real but I split that with my partner. They don't show that on the show because it's confusing for the audience to understand."
Read more at Talk Irvine.