Deciding to purchase a new flip is a big decision, even if you’ve done it a dozen times before. No matter how perfect a house looks for your next flip, a thorough appraisal is an absolute must. Every property you buy is your personal responsibility while you rehabilitate it and then it’s yours until a new buyer comes along and falls in love with your work. With this in mind, it’s important to have the full picture on the state of every house you buy, and the pre-existing appraisal information often just isn’t enough. From the old foundation to the new wiring, any flipper considering buying property needs to be aware of every possible factor when assessing its real value and deciding how much it will really cost to renovate. While this process is vital for any real estate purchase, it is especially pertinent when dealing with run-down houses ripe for remodeling. However, for a variety of very understandable but still challenging reasons, most of the important details aren’t readily available, for a variety of very understandable but still challenging reasons. Since you can’t count on the current owner to give you the full run-down of everything wrong with a house you want to buy, it falls on your shoulders to do the research and, if necessary, hire your own inspector to answer all the right questions before making the final purchase or deciding to move on to better opportunities.
However, for a variety of very understandable but still challenging reasons, most of the important details aren’t readily available, for a variety of very understandable but still challenging reasons. Since you can’t count on the current owner to give you the full run-down of everything wrong with a house you want to buy, it falls on your shoulders to do the research and, if necessary, hire your own inspector to answer all the right questions before making the final purchase or deciding to move on to better opportunities.
The Important Information
Beyond curb appeal and even aesthetic room design, the property you are buying has an overall maintenance health that represents how much you work will need to be done before the house is reasonably livable again. Most of the factors that contribute to a building’s true health are not apparent during a property viewing and may not even become evident until you have been in residence for a few months. When considering a new property, make sure to check on these items:
- A cracked foundation spells doom for even an apparently high-quality building,
- Leaky pipes and rusted-shut valves are sometimes easy to repair, sometimes not.
- Old and DIY wiring can cause fires or short out your equipment, but won’t be obvious because wires are usually tucked out of sight behind walls and ceilings,
- Repairing a roof can add a significant amount to your remodeling costs.
Wall Damage and Mold
- Look for cracks and check for the telltale signs of mold. Wallpaper is especially suspect as it can be used to cover significant water and structural damage.
Insulation and Infestation
- Check for soundproofing and temperature insulation, along with potential signs if insect infestation inside the walls,
The Missing Clues
While most people can acknowledge that this information is useful to have when looking into property value, it’s not commonly shared on real estate sites or even between realtors within the business. Postings for each property, for the most part, only mention positive things about the building without bothering to add full-disclosure information. Of course, sellers don’t want to scare away customers by mentioning the leaky pipes, but you might be surprised how many sellers haven’t bothered to learn these details about their own property. Even sources that claim to have all the information on a location will often have empty data fields or be terribly out of date.
How to Complete Your Data
When you’re really serious about buying a house, as long as it meets your structural standards, the best route is simply to clear a private inspection with the owner and go through the house yourself with your own inspector present. While this still won’t catch 100% of the potential issues, you’ll be a lot more certain of the true status of the building. With this information in hand, you have a much better idea of the flip’s prospect and of the property’s real value. If the structure is intact, the pipes are solid and the wiring is new, the flip is probably a worthwhile investment and you’re good to go.
There’s no need to get stuck with a property that’s worse off than it looked on your first walkthrough. No one wants to realize halfway through a project that the electricals need to be completely redone or that every pipe in the building is about to crumble into dust and your own inspection can make sure that doesn’t happen. With every flip you target, you will always want detailed and up-to-date information before making the final decision to purchase or pass. Of course, even if you find some hidden problems, you might be able to get a bargain if you’re willing to take them on as part of the renovation.
For more helpful information on finding a profitable flip, contact us today!