There has been a lot of excitement about getting into flipping homes. There is also a lot of people who love to buy a home because being flipped it has been updated with modern finishes and the sense of security that the home needs nothing because its all new. I have a few thoughts about it.
A lot of people get into flipping homes that really don't know what they are doing when it comes to repair or construction of homes. It seems that the most common thought is that you buy a home that is a Short Sale, Foreclosure, or HUD ect. and that you are getting a great deal. This is not always true. The next misconception is that by just painting and putting carpet most homes don't need much work. Then put it back on the market for a higher price.The truth is, and especially with older homes. The surface isn't the only thing that needs to be updated. Most older homes have knob and pull wiring. Not cheap to fix. Homes older than 1978 commonly have lead paint.
Unfortunately not everyone is a craftsman. I have seen many homes that the tile was set wrong. the cabinets are not square, or they added a wall in the basement to gain an extra bedroom and when they put up the sheet rock they had to notch around an electrical outlet because they didn't move it. Where as leaving it where it was was a fire hazard. Or they wanted to open up the kitchen to create an open concept, so they remove a wall that is bearing the weight of the house. Rather than hiring an engineer to properly size a beam or whatever, they take it upon themselves to choose something that they think is sufficient. Buying a home and fixing it isn't lucrative unless you have the personal know how. Paying someone to do it for you only makes the bottom line smaller unless you puff up the price of the home to make your money. This causes a false inflation.
I have a friend I just met who had just purchased a home from a guy who had just completed a full remodel. Unfortunately, having the excitement of having a good as new house, brought the over sight of many deficiencies. In this full remodel none of the electrical was updated and the breaker panel is overloaded with all the new can lights and fancy updates. The sewer line had a belly in it and the basement has flooded weekly since they have moved in. The dishwasher was hooked up with out the metal insert that completes the compression fitting. The pressure regulator that de pressurizes the water from the city's 110 psi to below the 80 psi max that is common on most fixtures was washed out. There are many things that buyers should be aware before spending their hard earned money on one of these on one of these homes.
Being a real estate agent I get to go through a lot of homes with people. I have gone through many flipped houses and have most of the time advised against those homes. I would suggest taking someone with you who actually knows something about the building process as well as building codes. I would suggest that you ask for the information on the contractor who did the work on these homes and check to see if they are even licensed. If the seller did the repairs himself and isn't licensed I would stay away. Just because they're dad was a carpenter for 40 years doesn't mean that the seller has 40 years experience.
There are simple things to look for when going through a flipped house.
Check for water staining in the basement or crawl spaces
Look at the outlets position and go to your local hardware store and get a tester to check the breakers and GFCI's.
If they had to cut the wall around something just so its exposed like and outlet they didn't do it right.
Check that the wet areas have a GFCI.
Make sure the water is on and check under the sinks and all plumbing that you can see.
Just look at the finishes. If they aren't installed well or look crooked. Chances are they were installed incorrectly or installed by someone who doesn't know what they are doing. Especially new floor tile
If you love a house you can still by it but just make sure you check it carefully and anything that you are uncomfortable with ask for it to be fixed and put it in writing.
There was a recent news story about how so many people are flipping houses now that it is inflating the market again. In 2008 many of the homes that sold were artificially inflated because of investors flooding the market by buying homes and reselling them over and over. This is a similar situation except now its being done by house flippers. They buy a home dress up the surface then mark it up and sell it. They don't address the real issues with a property they just cover it up. It isn't always intentional it is more because the lack the knowledge to know if something is an issue.
Regardless of my opinion, Just do your homework when shopping for a home. Also make sure that the people that represent you actually have the knowledge necessary to represent you to the fullest.
Just to be clear there are people out there who are doing it right but you have to be prepared so that you can weed out the garbage from the real gems.