14 Chip Gaines Real Estate Moves That Experts Think Are Too Risky

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Chip Gaines has become a legendary home renovation and real estate figure thanks to hit TV show ‘Fixer Upper’. Chip’s big personality, hammer wielding confidence and cowboy meets contractor style appear to have a Midas touch when it comes to property flips. People love him, they love his projects, but not everybody in the industry is sold on his approach. His efforts are visionary to some, and gambles that could prove costly if the market changes to others.

Chip’s methods in the real estate world are eyebrow raising — not for his flair, but for his audacity to question the way things are done. The problem is that his strategies could mislead everyday investors into thinking they can also replicate his success, experts say. Below, Chip’s riskiest real estate moves broken down, and why experts say to be careful before attempting these at home.

Heavily Relying on Trendy Design Choices

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From shiplap walls to open shelving, Chip has made it all popular. However, trendy designs go out of style very fast, even if these styles look great on screen. These properties may look like they belong in a certain era, but that could actually put off potential home buyers looking for timeless elements, and renovations just won’t be worth as much as you might think.

Local Market Demand Overlooked

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Chip’s bold designs often play well to a broad TV audience, but real estate is all about local market preferences. It might be harder to sell might a farmhouse chic design in a neighborhood with a modern slant. The key to avoiding mismatches is to know what’s going on in the local market, experts say.

Too Much Heavy Style Emphasis Over Buyer Needs

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Being personal is Chip’s signature style, and it’s a crowd pleaser. Real estate experts warn, however, that a flip done to the point of putting too much of one’s personality into it can alienate potential buyers looking for a more neutral canvas. Buyers may feel hemmed in by someone else’s taste and it’s tempting to put your own stamp on a property.

Buying Large Unfinished Properties

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Thinking bigger is better points to Chip’s history of taking on massive properties, but large scale projects equal more money, more time and more labor. Smaller properties are easier to manage and will generally yield better returns for new investors who don’t have Chip’s safety net.

Failure to Pay Attention to the Value of Professional Inspections

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Chip has a tendency to dive right into projects with confidence but skipping thorough inspections can equal disaster. A dream flip can quickly become a nightmare if you don’t watch out for structural damage, hidden mold, or plumbing issues. Regular investors need a professional inspection to avoid costly surprises.

Rural Properties Going All-In

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Chip’s love for rural settings is part of his charm, but rural properties come with challenges: It meant limited buyer pools, unpredictable utilities, and even tricky zoning restrictions. Real estate experts say that these properties could hang on the market if they don’t have the amenities or the accessibility that urban buyers expect.

The Curb Appeal Is More Important Than Interior Essentials

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Chip knows what it takes to make a home look amazing on the outside, but curb appeal alone won’t sway buyers if the interiors aren’t up to snuff. A well designed, functional layout and high quality finishes mean more to many buyers than a flashy exterior.

Take on Historic Properties Without a Backup Plan

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Chip falls headfirst into the restoration of historic homes, loving the charm of historic homes. But such properties come with layers of unforeseen problems — old wiring, lead paint, structural quirks — that can be expensive to fix. The Mortgage Reports found that the price tag for renovating a historic home can be as much as 30 percent higher than for a newer property. It’s easy to get caught up in the debt without a contingency budget or a safety net.

Take on Projects Without Enough Liquidity

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Real estate is unpredictable, but Chip is high risk tolerant. Lack of adequate cash flows or liquidity might make it hard for you to handle unforeseen expenses or market downturns. You’ll never consistently invest successfully unless you’re ready for the unexpected.

Underestimate the Power of Neighborhood Comparisons

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Chip sometimes sets his own standards, but comps (comparable properties in the neighborhood) are a huge determinant in what a property will sell for. A renovated property that is renovated beyond the area’s usual price range might not return the desired return. A rookie mistake is to over improve for the neighborhood.

Projects for Quick Turnarounds

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Chip often speeds up his projects, for the sake of timelines. Though you can rush renovations, you’d often make mistakes or leave important detail outs, and experts warn that too quick a job could mean expensive fixes later, particularly if new owners find problems once they move in.

The Custom Features That Limit Appeal

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Chip loves quirky door designs, reclaimed wood accents and custom builds. Although these are very unique touches, they aren’t always popular with a wide variety of buyers. If they are too niche, your customizations can limit your home’s marketability.

Energy Efficiency Upgrades Ignored

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Chip’s renovations aren’t always eco-friendly or energy efficient — those things are increasingly important to modern buyers. In this age of climbing utility costs, homebuyers rate energy efficiency as very important in their assessment.

Overconfidence in Property Flipping Market Trends

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Chip’s approach to flipping properties is high risk, high reward, but experts warn that the market is not always going to be on a steady trend. Housing prices are a roller coaster, something even seasoned investors can get burned on if they bet too much on continued growth in property values.

Disclaimer: This list is solely the author’s opinion based on research and publicly available information.

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