Heather Dubrow on Real Estate Wins and Fails, First-Date Refunds and Financial Red Flags
In this episode of Money Rehab, Nicole Lapin speaks with Heather Dubrow about real estate investments and financial management. Dubrow shares her experiences in property investment, including a Beverly Hills purchase that led to significant budget overruns, and explains how these experiences shaped her current approach to real estate. She also discusses how she and her husband Terry divide financial responsibilities in their household, and describes their strategy for teaching their children about money management.
The conversation covers Dubrow's views on financial transparency in relationships and social event etiquette. She explains why she considers financial discussions essential in the early stages of dating, and shares her perspective on hosting social events, including her belief that hosts should cover all costs rather than charging guests. The episode also touches on how the Dubrows recovered from a $2 million loss due to fraud and adjusted their financial oversight approach.
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1-Page Summary
Real Estate Investment Experiences and Lessons Learned
Heather and Terry Dubrow share their journey through real estate investment, highlighting both successes and setbacks. In a notable venture, they purchased a Beverly Hills property for $16.1 million, but encountered significant challenges when contractor issues led to $5 million in budget overruns. This experience taught them the crucial importance of thorough contractor vetting and strict budget monitoring.
Following this setback, Heather explains their shift toward more manageable real estate investments, particularly expressing interest in purchasing the unit below their current high-rise residence. She now prefers the convenience and low maintenance of high-rise living over standalone properties.
Household Financial Management and Decision-Making
The Dubrows have established clear financial roles within their household: Heather manages day-to-day finances while Terry focuses on investment strategy. After losing $2 million to fraud from a misrepresented tax preparer, they became more proactive in their financial affairs and now make all major financial decisions together.
Heather emphasizes their commitment to teaching their children financial responsibility. They provide their older children with credit cards to build credit scores early and monitor usage carefully, believing strongly in instilling financial literacy at a young age.
Perspectives on Personal Finance, Relationships, and Etiquette
When it comes to relationships, Heather strongly advocates for discussing finances early, viewing reluctance to share financial information as a potential red flag. She emphasizes the importance of understanding a partner's financial situation before marriage.
Regarding social events, Heather holds firm beliefs about financial etiquette. She disapproves of hosts charging guests for events like weddings, believing that hosts should cover all costs and plan within their means. This principle extends to her own celebrations, where she prefers to manage and pay for events herself.
1-Page Summary
Additional Materials
Clarifications
- Heather and Terry Dubrow are known personalities in the entertainment industry, with Heather being an actress and television personality, while Terry is a renowned plastic surgeon. They have been featured on reality TV shows and have shared aspects of their personal and professional lives with the public. The couple is also known for their involvement in real estate investments and financial management strategies, which they have discussed in various media platforms.
- The Dubrows faced a significant financial setback when contractor issues led to $5 million in budget overruns on a property they purchased for $16.1 million. This unexpected increase in costs highlighted the importance of thorough contractor vetting and strict budget monitoring in real estate investments.
- Heather Dubrow believes hosts should cover all costs for social events like weddings and not charge guests. She values planning events within one's financial means and taking responsibility for the expenses. This principle extends to her own celebrations, where she prefers to manage and pay for events herself.
Counterarguments
- While thorough vetting of contractors is important, it's also crucial to recognize that not all budget overruns can be attributed to contractor issues; market fluctuations and unforeseen complications can also play significant roles.
- Strict budget monitoring is essential, but flexibility in budgeting can sometimes lead to better outcomes if it allows for adjustments to unforeseen circumstances or opportunities for improvement.
- High-rise living may offer convenience and low maintenance, but it might not provide the same privacy, space, or potential for customization as standalone properties.
- While having distinct financial roles in a household can be effective, it's also important to ensure both partners have a comprehensive understanding of all aspects of their finances to prevent dependency on one partner and to ensure informed decision-making.
- Making all major financial decisions together is a good practice, but it's also beneficial to have a trusted financial advisor or third party to provide expert advice and an objective perspective.
- Providing children with credit cards to build credit scores is a strategy that comes with risks, such as the potential for developing poor spending habits if not monitored and guided properly.
- Discussing finances early in a relationship is important, but it's also necessary to approach the topic with sensitivity and respect for privacy, as individuals may have valid reasons for gradual disclosure.
- While it's generally considered good etiquette for hosts to cover event costs, there may be cultural or personal preferences that accept or even expect contributions from guests in certain situations.
- Managing and paying for events oneself can be a generous gesture, but it's also important to recognize that not everyone has the financial means to do so, and that cost-sharing can be a practical solution for some.
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Real Estate Investment Experiences and Lessons Learned
Heather and Terry Dubrow share their ups and downs in the world of real estate investment and flipping, revealing the tough lessons they've learned and how their strategies have evolved over time.
Heather and Terry's Real Estate Investment and Flipping: Highs and Lows
Heather Dubrow recounts a recent real estate venture that was plagued by financial losses due to a mishandled budget and lack of proper vetting for contractors.
Purchased Beverly Hills Property For $16.5m, Lost $5M To Contractor Overruns
Heather talks about a Beverly Hills property they purchased for $16.1 million and eventually sold for $16.5 million. Unfortunately, the experience was tinged with difficulty as they encountered issues with their contractor, resulting in them being $5 million over budget.
Experience Showed Them the Value of a Clear Budget and Thorough Contractor Vetting For Renovations
The couple's ordeal emphasizes the significance of setting a clear budget for renovations and vetting contractors rigorously. Heather's initial budget projections accounted for overruns up to $18 or $19 million. However, the reality was that they received a revised budget of $23 million from their contractor, highlighting a stark deviation from their expectations. This experience taught them the valuable lesson of closely monitoring the budget throughout the renovation process.
Heather advises homeowners to be cautious with renovation spending unless they intend to stay in the house for an extended period, potentially up to 30 years. She warns that contractors might oversell renovations, impacting long-term profits.
Heather and Terry's Real Estate Success
Despite the setbacks, Heather and Terry experienced success in real estate. Heather is not sentimental about selling houses and refers to her home as just brick and mortar. She has designed homes from scratch, imbuing them with unique elements such as drawers that heat towels.
After Beverly Hills, Heather and Terry Shifted From Large-Scale Real Estate to Focus On Comfort
Post-Beverly Hills, the Dubrows have reoriented their real estate approach towards comfort and convenience, particularly as they face an ...
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Real Estate Investment Experiences and Lessons Learned
Additional Materials
Clarifications
- Heather and Terry Dubrow's real estate investments involved a Beverly Hills property purchased for $16.1 million and sold for $16.5 million, but they faced a $5 million budget overrun due to contractor issues. Their experience highlighted the importance of setting clear renovation budgets and thoroughly vetting contractors to avoid unexpected financial setbacks. Despite setbacks, they found success in real estate and shifted their focus towards more comfortable and convenient living arrangements post-Beverly Hills.
- The Dubrows shifted their real estate focus from large-scale projects to comfort and convenience due to their changing family dynamics and the desire for a more manageable living situation. This transition was influenced by the ...
Counterarguments
- The financial loss in the Beverly Hills property could be seen as a lack of due diligence rather than just mishandled budgeting and contractor issues.
- The advice to be cautious with renovation spending might be too conservative for some investors who are willing to take on more risk for potentially greater rewards.
- The success Heather and Terry have experienced in real estate might not be easily replicable for the average investor without their resources and expertise.
- The shift in focus towards comfort and convenience could be criticized for potentially missing out on more lucrative investment opportunities that require more hands-on management.
- The preference for high-rise living over standalone properties ...
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Household Financial Management and Decision-Making
Within the realm of household finance, Heather and Terry Dubrow display a proactive approach characterized by defined roles, shared decision-making, and an emphasis on teaching their children financial responsibility.
Heather and Terry's Defined Financial Roles
Heather and Terry Dubrow have established specific roles within their financial management routine.
Heather Manages Finances; Terry Handles Investment Strategy
Heather Dubrow is responsible for managing the day-to-day financial responsibilities of their family. Alongside a bookkeeper and accountant for the more complex matters, Heather determines what the family needs and adheres to a philosophy of spending within their means, avoiding debt, and being fiscally responsible. Terry, on the other hand, concentrates on the investment side of their finances, investing in the stock market and venture capitalism, while Heather takes on the task of building the houses.
Setback: Terry's $2M Fraud Spurred Greater Proactivity In Financial Affairs
Heather and Terry suffered a serious setback when they were scammed out of $2 million by an individual they believed to be an accountant but who was in fact just a tax preparer. This person came recommended by someone wealthy and famous; however, Heather acknowledges that they had not been proactive and hadn't asked the right questions, which led to a breach in trust. Consequently, this incident led Heather to involve herself further in understanding their financial standing, prompting changes that ultimately played a significant role in the accumulation of their wealth.
Couple Understands Finances, Makes Major Decisions Together
Despite this difficult experience, the couple now understands their financial situation better and makes all major financial decisions together. Heather mentions having consultative meetings with financial experts to contemplate the next steps for their money in terms of kids and estate planning, highlighting their joint decision-making process.
Heather and Terry Teach Their Children Financial Responsibili ...
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Household Financial Management and Decision-Making
Additional Materials
Counterarguments
- While Heather and Terry have defined financial roles, it could be argued that this division of labor might create a knowledge gap where one partner is less informed about certain aspects of their finances, potentially leading to issues if the other partner is unable to manage their respective responsibilities.
- The decision to make major financial decisions together is generally positive, but it could also lead to slower decision-making processes or conflicts if the couple has differing opinions on significant financial moves.
- Consulting financial experts is a wise strategy, but it can also be costly and may not always result in the best outcomes if the experts' advice does not align with the couple's personal financial goals or situation.
- Teaching children financial responsibility is important, but giving older children credit cards might not always lead to responsible spending habits and could potentially encourage debt if not managed correctly.
- Si ...
Actionables
- You can designate specific financial roles within your household to ensure clarity and efficiency in managing money. For example, one partner could handle everyday expenses and bill payments, while the other monitors long-term savings and investment strategies. This division of labor allows each person to become an expert in their area, leading to more informed decision-making and potentially better financial outcomes.
- Develop a family financial education plan that includes regular discussions and practical exercises for different age groups. Start with simple saving and budgeting tasks for younger children, and as they grow, introduce more complex concepts like credit, investing, and taxes. This could involve setting up a mock stock portfolio for teenagers or using apps that simulate financial scenarios, which can make learning about money management both engaging and educational.
- Create a 'financial reaction plan' to prepare for potential scams or unexpected financial setbacks. T ...
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Perspectives on Personal Finance, Relationships, and Etiquette
Heather Dubrow shares her thoughts on the interplay between personal finance and relationship dynamics, as well as her perspective on financial etiquette in social situations.
Heather Emphasizes Discussing Finances, Budgets, and Credit Scores in Relationships
Heather underscores the necessity for financial compatibility and transparency in relationships by exploring how partners deal with each other’s financial information.
Financial Compatibility and Transparency: Probing Partner's Finances
Heather stresses the importance of discussing finances early in a relationship and views a reluctance to discuss finances as a potential red flag. She recalls a conversation with Gretchen, who felt hesitant to marry her partner of 16 years due to his financial situation. Dubrow emphasizes the need to know what one is getting into financially before entering a marital contract.
Heather Views Reluctance to Discuss Finances As a Red Flag
Heather believes that not discussing finances could indicate a problem in the relationship. She humorously mentions discussing FICA scores on the first date. She also indicates that she would probably not date someone with a bad credit score, further underscoring the significance she places on financial responsibility within relationships. Heather also stresses the importance of individuals being proactive and staying in charge of their money, indicating her concern for those who are naive about their finances.
Heather considers it a red flag if someone feels uncomfortable discussing their finances with someone they're about to marry, emphasizing the importance of this discussion for relationship compatibility. When it comes to her own experience with her now-husband Terry, she implies that she did not question his financial background given the visible signs of his success as a doctor.
Heather and Terry's Strong Opinions on Wedding and Birthday Financial Etiquette
Dubrow conveys her strong opinions regarding financial etiquette, particularly when it comes to the responsibilities of a host during social events such as weddings and birthdays.
Host Should Cover Event Costs, Not Guests
Heather finds it unacceptable when a bride and groom charge guests for their wedding dinner. She believes hosts should cover the costs of events they plan and advises hosting an event that aligns with one's budget instead of passi ...
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Perspectives on Personal Finance, Relationships, and Etiquette
Additional Materials
Clarifications
- Heather Dubrow emphasizes the importance of discussing finances early in relationships to ensure compatibility and transparency. She considers a reluctance to talk about finances as a potential red flag, indicating the significance she places on financial responsibility within partnerships. Heather believes that being proactive and informed about one's financial situation is crucial for maintaining control over one's money. She also values understanding a partner's financial background before committing to a serious relationship.
- Heather Dubrow emphasizes that hosts should cover the costs of events they plan, like weddings and birthdays, instead of pas ...
Counterarguments
- Discussing finances early in a relationship might not be comfortable or appropriate for everyone, as some individuals may prefer to establish trust and a deeper connection before delving into personal financial details.
- A reluctance to discuss finances does not necessarily indicate a red flag; it could reflect cultural differences, personal privacy preferences, or past experiences with financial abuse.
- While knowing a partner's financial situation before marriage can be beneficial, it's also important to recognize that financial situations can change, and a willingness to work through financial challenges together can be equally important.
- Financial responsibility is important, but there should be room for understanding that financial mistakes happen and that a credit score is not the sole indicator of a person's worth or their ability to contribute to a relationship.
- Being proactive about personal finances is important, but not everyone has had the same access to financial education or opportunities, which can affect their financial knowledge and management skills.
- The belief that hosts should always cover event costs may not take into account varying financial abilities and the increasing costs of events; some cultures and communities regularly practice potluck-style gatherings or shared expenses to alleviate financial burdens on any single host.
- Charging guests for wedding attendance, while often seen as poor etiquette, cou ...
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