November 29, 2014
There are too many half baked experts jumping into the flip business, flipping property is not everyone’s game you need to be able to analyze a good property from a bad property.
Sometimes a distressed property might have the kinds of repairs that would make you want to run in the other direction, if you buy this kind of property, remember you are in for the long haul, at the end you’ll end up praying to sell at even or even accept a marginal loss just to get your money out of the project.
Before you become afraid of the flip business entirely, there are quite easy things to spot in a property that can check, let’s call this the flop list, the flop list will show you if the property is a flip or a flop.
If you go scout a property and it contains more than 3 things mentioned in the flop list, make sure to run as fast as you can in the opposite direction no matter how low the owner or realtor agrees to go, there are just some projects that are not at all worth it.
Water is your Bane
When there are water stains on the walls or ceiling, you can be sure the renovations are going to cost more than what you possibly will invest in purchasing the property, water damage is a No No, never invest in a property that shows even a hint of water damage.
Make sure to ask, people try to mask water damage by wall papering and other methods, make sure you hire an professional inspector to check for water damage.
Mold or Fungus
Mold or fungus could be the initial signs of moisture, which could be both a sign of water damage or improper ventilation or insulation, make sure you get a certified professional check the house for pests and fungus before you make a deal with the owner.
Sagging Floors
If the floors are Saggy or uneven you can be sure the foundation is weak, and repairing the foundation of the house takes a lot of money, make sure you get this inspected right away and tick this off if it’s there, find out how extensive the damage is.
Neighborhood Ambience
Broken glass, graffiti on the walls, people near dumpsters smoking or drinking, might be a good idea to move on, don’t even thing about stopping, just go forget about the listing save your car.
Neighbors
The best neighbors are seen but not heard, if you happen to be on inspection and hear the delicate sounds of screaming and bickering and/or smashing cutlery, no need to inspect the house you are in, just calmly walk out, and don’t look back. (Visit back in a week to see if the neighbors’ house is listed for sale)
Awkward Layout
If you enter a property and spot inaccuracies like tilted walls or unbalanced hallways, make sure to get a GC to visit the property and check the floor plan for inaccuracies, if the measurements do not line up and inaccuracies are observed valuate the property accordingly, but if there is any other discrepancy simply move onward.