Buying a Flip House Can Be Risky
Getting a Home Inspection by a competent Inspector is more critical than ever.
Some neighborhoods in San Diego have undergone dramatic changes over the last few years made possible by the downturn in the real estate market. Many run down, foreclosed properties have bee utterly transformed into beautiful homes. The curb appeal of these homes has encouraged neighbors to improve their houses, giving entire streets a new look.
These properties, commonly known as “Flips”, are often purchased at auction by savvy investors for a low price. They systematically renovate these houses and put them back on the market to sell for a profit. These former “tear-downs” are now pretty houses that many people fall in love with. “It looks like a brand new home” or “I can’t believe how beautiful this house is” are just some of the comments we hear from clients.
Many of the professional Flippers do a great job. They use licensed contractors and perform a true renovation. They upgrade plumbing, electrical, heating and AC, roof, etc. These homes are truly transformed into show-places that any of us would be proud to own.
Sadly, many of these flipped houses are done by less than scrupulous individuals. They buy really run down houses at rock bottom prices. After simply adding paint, flooring, new counter tops and a few new appliances, they too put these houses back on the market. Truly lipstick on a pig. The work is done by non-licensed workers who cannot be held responsible after the sale.
While performing home inspections on the poor quality flips, we find everything from rusted and cracked cast iron drain lines to old, over-taxed electrical systems. Here is a short video from a recent inspection which highlights some of the technical problems we find.
Click the photo below to watch our video on Flip Houses.
Tip: If you are purchasing a flip ask the seller for the contractors who performed the work. You might also want to check for any permits that were pulled. This is very important if there have been additions to the structure as you may have property tax implications. And finally, always get an inspection by a really experienced, technically astute home inspector.