Have you seen those TV shows where amateurs try to convince themselves that they know what they’re doing and end up getting in way over their heads trying to flip houses?
Usually, these shows end with a professional coming in to bail out the would-be flippers.
But here in the real world, that is not always the case. Once they realize that they are in way over their heads, many wannabe flippers start cutting corners and overlooking serious issues just to get a failed project out of their hands.
These poorly renovated homes are potential land mines for buyers.
They might look great on the surface, but as you dig deeper you are sure to find one expensive problem after another that the flipper simply masked to get a higher sale price.
Knowing what details to look for when you walk through a house that has been recently flipped could save you a ton of time and money over the years. Here are some of the important questions you are going to want answers to before committing to buying a flip:
Who Did the Work?
Most people will advise that you stay away from any flip where the owner did the work themselves. This is really an issue that is up to your discretion though. If the owner is a reputable contractor in your community, there is a good chance that the work has been done correctly and is up to code.
After finding out who did the work, you might want to look into other flips that person has previously completed. Ask for references so that you can see what condition those homes are in now.
What Exactly Was Changed?
Asking about what work was done to the house will help you navigate two areas. First, you will know what improvements to have your inspector focus on. Second, you will know what improvements you might have to make yourself.
Many flippers avoid fixing issues like insulation and roofing because they do not get a great return on investment in those areas. But there is no point in buying a house with a great modern kitchen if the roof leaks.
Were There Permits & Inspections?
In addition to asking the listing agent to provide you with this evidence that the work was completed properly, you can also consult with your local building department for more information. The lack of permits and inspections does not necessarily mean that the work was done poorly, but their existence is another layer of protection for you.
The Inspector is Your Friend
All of these questions are designed to get background information for the inspector you hire to go through the home before you close on it. It is important to remember that the inspector is on your side here, so share as much information with him as you can.
Inspectors will be able to identify potential problem areas like poorly designed kitchens where cabinet doors open into each other or the refrigerator door doesn’t fully open because it is up against a wall. They might also find handrails that were not properly anchored, drains that leak from poor plumbing, second-rate electrical work, and many other code violations.
If your inspector finds a number of problems with the quality of work that went into a house, you can use this information as a red flag to walk away from a potential money pit or as a bargaining chip to get the seller to lower the price enough to cover the necessary improvements.
Buying a flip is not necessarily a bad idea, provided the work was done right. But either way, you are going to want to do your homework and understand exactly what you are getting yourself into.
Your local Carrington Real Estate Services agent can help you navigate the waters of buying a house that’s being flipped. Contact an agent today!