I love the idea of transforming a house “in rough shape” to one of beauty and function. Over my 40+ years as a homeowner, I’ve done a lot of remodeling and enhancements. I really enjoy the work, and the results.
Rehabilitating a property involves repairing what is wrong, then applying the cosmetic finish. Sometimes it’s easier to tear out and replace, and other times a quality repair can be performed. Individuals who perform this work talk about the “bones of the house” and making sure they are strong, and designed to support all of the “bling”.
Flipping houses occurs when someone buys a property, transforms its old self into a strong, attractive, home and then resells it. The intent is to do this and make a profit. The work is known as “adding value” and the profit comes when the new “yield” is greater than the total cost. The process has been glamorized on television and many people think this is a great way to make a living. That can be true, but the work is hard IF it is done right. To the inexperienced, however, the process can become a costly nightmare when the results are less than what a consumer desires.
With the hope of quick profits, some people seek distressed sales, make cosmetic improvements, and then use marketing skills to unload the price at a much higher price. The caveat, “Buyer Beware” immediately comes to mind. A little paint, new floors, a bit of tile, and a lot of cleaning, and the “new property” sparkles and seems to be a gem, awaiting an eager new occupant. Sadly, that makeup may be very thin, and underneath lies a monster waiting to devour the unsuspecting buyer. I’ve seen some of these quick profit properties up close, and have a few tips for potential buyers.
- What is the quality of the paint work ? It takes extra time and effort to do a quality paint job. Take a very close look at the work. If the flipper “goes cheap” on the painters, it reflects on all of the other work that was performed. I recently observed a flip being repainted and the material was thinned to save money. Two weeks later and old stains were already bleeding through. Iron work was so thinly painted that it was not a consistent color, and this left it vulnerable to rust. The exterior was not properly prepped and would need to be repainted within two years. Some areas of damaged wood were filled with putty ( which will dry and fall out ) rather than being replaced. Most of the paint issues were readily visible, reflecting the same poor quality as was performed on other areas.
- What is the quality of the flooring ? Brand new carpet, wood floors, and tile may look amazing. Check the brands, then see if this is a better, or lesser, quality material. Also look closely at seams, and level. Wood and tile floors should be flat with no ridges, and totally even. Walk the hard floors to see if the area is solid, or hollow, beneath. A leveling coat should be applied to the subfloor before laying tile or wood ( even with a floating wood floor ).
- Are full pieces used for the molding ? A quality installation will not patch pieces of molding together to save a few dollars. Also, corners will cleanly match. Is the molding flat against the wall, and does the wall run straight ( rather than bowing out )?
- Look under all sinks and check the fittings Do you see evidence of any water leaks on the wall or below the sink. Plumbing issues are common and very costly to repair. Run water in each sink, then use a tissue to check the drainpipe underneath for dampness. Make sure the drain empties without any backup and flush the toilets to see they empty quickly and completely.
- Inspect the yard carefully If all the planting is new, it may indicate problems with the soil that were never corrected. Look for ponding water, and dry spots. Turn on the sprinklers and make sure there is no runoff, and all areas are properly covered. Research the plants located next to the house or walkways. I recently saw some Italian Cypress planted about 8” from a house, and 3” from a walkway. As they grow they will be a major problem for the homeowner because this type of plant has roots that will tear up the walkway, and impact the foundation. A professional landscaper would never have done this.
- Look for leaks Check all ceilings for any indication of repairs and/or leaks. First floor ceilings may reveal leaks from bathtubs, toilets, and showers. Top floor leaks often reflect roofing issues. Leaks lead to mold, a dangerous and expensive problem. Leaks also lead to rotting wood in the frame.
These are just quick inspections you can do yourself. If you then think about pursuing the purchase of a flipped property, your agent can give you an analysis of what the flipper paid, the cost of the improvements, the time taken to perform the work, and the potential profit. This helps you understand the “value added” by the work. A $30,000 profit for a month of quality work may seem valid, but a $200,000 profit for a month of very shoddy work ( on a $500,000 property ) may be an indicator that quality was not a factor.
Finally, before concluding a purchase, be sure to have a professional do a detailed inspection, and have a separate HVAC inspection performed. Your agent can help you get the right people to do these jobs, then take the time to carefully review their reports.
There is no perfect house for you. After you take possession, there will be expenses to personalize the property to your personal tastes and needs. Be careful, and use your consultants. You don’t want to waste money on repairing what someone else did incorrectly or with poor quality.