Flipping has always been a good way of making money in real estate but flipped homes do not always receive the best of treatment and the renovations are quite often just cosmetics applied to major issues that are not being addressed and repaired accordingly. When you are out house hunting, keep an eye open (or both) for misleading “improvements”.
How to spot flipped homes, from the business side
Real estate professionals know where to look and what questions to ask in order to spot a flipped home. Follow the money and the paper trail.
- A flipped home has probably been bought and sold several times and if the period between purchase and listing is a few months, it may have been a flip.
- The purchase price was way lower than the resale price.
- If the seller has several transactions under his name, chances are he his a into flipped homes.
- If the house is old and everything inside is brand new but on the cheap side.
- If your State doesn’t require a “Full disclosure agreement”, you can still have the seller write a report of what they did to the home and have them sign it.
- All the permits for upgrades are available to the buyer. Go to the permit authorities and ask to see them, that way you will know exactly what has been done.
How to spot flipped homes, from the construction side
The best way to spot flipped homes is to spend time inspecting them.
- Inspecting the interior.
Tell tale signs are poorly designed kitchen and bathrooms. Countertops, handrails, bottom cabinets, fixtures and hardware etc... have not been properly secured.
Have the gas company send a technician to inspect the heating system because in poorly fixed-cheaply flipped homes, the heating system is often where flippers cut corners. And check the furnace blower for sanding dust left when installing a new heating system in a hurry.
Make sure the AC is in working order and not at the end of its life expectancy
Check the plumbing, even if the sinks and or the pipes are brand new, there is a big chance that the drain haven’t been tried and checked for the reason that nobody has lived in the house since it was remodeled.
Expect to have to replace the insulation, there is a good chance it hasn’t been replaced
Even though the electrical system is where house flippers do not usually cut corners because of the risk of the house burning down, have the system checked by a reliable electrician.
- Inspecting the exterior.
The doors and windows still show rotten wood, the sidings and the chimney have been very poorly repaired but everything is in the detail so you really need to know where to look and what to look at.
The roof being a major expensive when renovating a house, if it’s not leaking, house flippers will not touch it, but it could be in bad shape nonetheless.
The foundations are what they are, have them looked at but the usual signs like cracks in the drywall won’t be there because it’s been patched and painted.
Not all flipped homes are necessarily cheaply-fixed run-down houses but many are, especially after the last recession and the crash of the housing market. Houses have been abandoned after a foreclosure and house flippers have flocked auction houses to buy as many as they could for a big and fast return on investment.
There are still some business people out there who are not looking for a quick profit a fast flip, they will do a thorough job, everything will be well documented and in order, the work and the craftsmanship will be clean and perfect and buying a home from them is a good investment after all. The best way to avoid bad surprises that can make your life miserable, cost you a lot of money in the future is to hire a licensed contractor. A professional will know if the building codes have been respected, he will inspect your home from top to bottom, inside and out, to make sure that you don’t fall for a flipped home that is not worth it.
As a full-service construction and remodeling company in San Diego, Collom Construction Inc. possesses the resources necessary for a successful project. We deliver products of quality craftsmanship and work with you to meet your needs and respect your budget.
Give them a call today to set up an appointment for a free quote.