Tarek and Heather El Moussa’s First Flip Was a Flop: What We Learned Watching ‘The Flipping El Moussas’ Premiere

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You might know Tarek El Moussa from “Flip or Flop” and Heather Rae El Moussa from “Selling Sunset,” but now that they’re hitched, of course, it was inevitable that they’d have their own show together, “The Flipping El Moussas.”

Yet, while one might presume their combined expertise and experience might instantly gush real estate gold, their show’s premiere suggests they’ve got some growing pains to get through first.

In the first episode, rightly called “Our First Flip,” we find Tarek and Heather Rae (then pregnant with their first child) about to embark on their initial renovation together.

It’s a four-bedroom, three-bath midcentury modern house in Silver Lake, an increasingly hip suburb of Los Angeles. Tarek’s company, Tarek Sells Houses, has paid an eye-watering $2.15 million for the home. They’re hoping to fix it up and sell it for around $3,100,000, netting about a $400,000 profit.

Oh, the optimism of newlyweds, even if they are both purported to be real estate experts! We found the listing for this house once it was finished, and let’s just say things didn’t go as planned.

But to their credit, this new show does not sugarcoat things and gives an unflinching look at how this maiden investment unfolds. Along the way, they (and we) learn a lot that will (hopefully) make future flips smoother sailing. Here’s what we learned as we cringe-watched our way through Tarek and Heather Rae’s first flip.

Learn the four F’s of flipping

Heather Rae El Moussa recites the four steps in flipping.

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The hopeful couple start out on a positive note: in bed. That’s where Tarek tells his new wife, “I’m going to teach you the most important lesson right now.”

Yet Heather Rae has already done her homework and chirps out the “four F’s” that Tarek has been teaching other novice flippers on his old show, “Flipping 101 With Tarek El Moussa.”

“Find it, fund it, fix it, flip it,” she says smugly. No mansplaining required!

Buying a house sight unseen is a risk

Silver Lake flip

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As Tarek and Heather Rae tour the house for what appears to be the first time, they realize the flaws are myriad and will cost hundreds of thousands of dollars to fix.

This begs the question: Why did they pay so much for this house in the first place? Surely they were aware of its numerous problems and how much it would take to rectify them, right? Apparently not, since they’d taken a gamble and bought the house sight unseen.

“Over the years, I’ve bought hundreds and hundreds and hundreds of houses, and the majority of them we have seen,” Tarek explains. “But there are some scenarios where you just can’t go into the house. The seller won’t allow it, the tenant won’t allow it.

“It’s already a risky business, but when you’re going into a project with no knowledge, that’s where you can get into big trouble,” he sees.

Truer words were never spoken. But to Tarek’s credit, the listing does mention miraculous views, and Tarek was fairly sure those vistas will make this home practically priceless.

A ‘bedroom’ is not always a true bedroom

Weird closet was listed as a bedroom.

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Tarek and Heather Rae realize buying the house sight unseen is going to be a big problem when they walk into the second level and find two bizarrely laid out closets, one with a tiny staircase to nowhere.

“What the heck is this?” asks Heather Rae about these strange little rooms.

“I think these are the two bedrooms,” guesses Tarek. And sure enough, he’s right: The listing has counted them as bedrooms, when in reality, one of them shouldn’t even be included in the square footage of the home. An official review of the floor plan shows it should be considered nothing more than “crawl space.”

The El Moussas thought they were buying a four-bedroom, 2,162-square-foot home, but the final, accurate listing posted after they’re finished with their renovations shows it to be a three-bedroom, 1,969-square-foot home. Ouch!

Don’t tip your hand to the contractor

Tarek El Moussa explains a strategic mistake.

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With all the fixes that need to be made to redesign this house so it will attract a $3 million buyer, Tarek estimates the renovation will cost about $400,000. So when Jeff, the contractor, tells Tarek and Heather Rae that he can do everything they want for about $315,000, Heather Rae says enthusiastically, “That’s great!”

“No,” objects Tarek, later explaining, “Honey, when the contractor gives you a number, whether it’s good or bad, you never say it’s good.”

Tarek knows that a good negotiator never accepts the first bid, no matter how great it might seem.

Carrying costs can kill a profit

This beautiful renovation took longer than expected.

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Remember the second “F” of flipping, the “fund it” part? Well, it turns out they made some bad calls here, too.

To run this project, Tarek has taken out a hard money loan, which is a short-term loan from a private investor with interest rates usually much higher than those of a traditional loan funded by a bank or mortgage company. The expense is counted in the carrying costs of a flip budget.

On a normal flip, which takes only a few months to renovate and sell, this is not a problem. But alas, this is no normal flip. Tarek bought the house in April 2022, and it wasn’t ready to list until December, a full eight months later.

Just before putting the house on the market, Tarek reveals that hard money costs had already risen to $120,000, taking a big bite out of their anticipated profits.

And here’s the killer: These carrying costs could still be mounting, because the home has been on the market now for 75 days as of this publication, and it still hasn’t sold. Unless Tarek paid off the hard money lender already, this could be a real problem.

What happens to Tarek and Heather El Moussa’s first flip?

Fully renovated Silver Lake home

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The El Moussas originally paid $2,150,000 for this house. The renovations were estimated to come in at $315,000, but they were charged $47,000 extra in change orders. Then there was the $120,000 in hard money loan payments. Add $100,000 in closing costs and commissions, and their break-even point has spiraled up to about $2,732,000.

And since then, the market has cooled somewhat, so the price they’d once hoped to get might no longer be realistic.

“When we first walked into this house, the market was very different,” says Heather Rae when discussing the list price. “So I don’t think we can go above $2.9 million.”

In December, this home hit the market for $2,895,000.

Fast-forward to today, the house is still on the market and the price has been slashed twice. It’s now listed at $2,695,000. If they get the asking price (which is not a given in this market), they will have lost $37,000. But then there are those unknown hard money loan costs mounting.

This is not a huge sum for someone like Tarek, but it’s not exactly an auspicious way for Tarek and Heather Rae to start off their career together as flippers. But our hats are off to them for being honest.

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