I’ve been inspecting several flipped homes lately and it inspired me to write this article. Full disclosure, I have nothing against investors, I’m happy they’re buying these homes and getting them back on the market and in to the arms of loving owners. The process represents part of the American dream. Make an investment, pour some hard work in to it, and reap some rewards. Capitalism at its finest.
What I typically find with flipped homes, is what we kindly refer to as “lipstick on a pig”. While not always the case, often times we find the home has new paint, flooring, updated kitchen and baths, with a whole bunch of issues lurking under the surface. Sometimes there is more than just cosmetics, I have seen flips with new roofs, updated electric and plumbing etc.
The most common problem I find with flips are things installed or updated by people who aren’t necessarily qualified or experienced at doing so. That typically also means that proper permits were not obtained and chances are no one has inspected this work to make sure it was done properly or meets local standards.
Last fall I inspected a flip home. The listing info indicated the roof had been updated as part of the renovation. I arrived to the inspection and found half the new roof shingles laying in the back yard. Upon inspection of the roof itself, I found it had been installed by someone with little to no experience in roofing, and unfortunately this roof needed to be torn off and replaced by someone who knew how to do it. On another recent inspection of a century old home, the entire electric system was advertised as “brand new, recently upgraded”. I found defect after defect throughout the system including some conditions that were completely unsafe. In both of these scenarios, I found no records of permits having been obtained for the work that had been done.
Flip homes are attractive, especially to first time buyers, and that’s ok. Just make sure your client understands the potential things that may come up and that they’ll need some extra patience to get through to closing. Buying a flipped home is like negotiating a nuclear peace treaty; “trust, but verify”. Try to get a list of updates from the owner, and do some research to see if these things required permits and if they were obtained. Whatever you do, don’t forgo a good home inspection. You’ll want an experienced professional on your side to help find any underlying problems.