Ideally, the perfect house flip would involve purchasing a home in a reasonable neighborhood that needs a minimal amount of upgrades. Add new flooring, paint, fixtures, lights and possibly new appliances. If only it were so easy
. With high demand and low housing inventory creating a seller’s market and the
competition from larger entities, those types of deals are harder to find. A good house flipper in today’s market will need to broaden their criteria and take on homes that need more than a little TLC. In addition to the basics (paint, flooring and fixtures) think of more extensive upgrades like the kitchen and bath remodels, window upgrading, and landscaping.
Know What to Look For Before Making an Offer
Beyond avoiding a bad neighborhood (low performing schools, lots of rentals and turn-over, industrial settings), some things to look out for when evaluating a property are foundation problems, roof repair or replacement, and replacing the HVAC system. Also if you are looking at a house with siding be aware that the siding may indicate damage underneath. Resources like FlipperForce can help you not only evaluate your deal and help with project management but also help you estimate your rehab cost.
Foundation Problems: From an article from the Budget Dumpster Blog, there are 9 ways to identify foundation problems.
- Test doors and windows
- Look for sagging floors or ceilings
- Investigate musty smells in the basement
- Inspect sources of mold
- Check for gaps between exterior windows and walls
- Examine any bowed walls
- Pay attentions to the chimney
- Look for nails popping out of drywall
- Diagnose any crack in the wall or floor
Roof Problems: American Dream Restoration identifies at least eight signs that indicate a roof may need to be replaced.
- Shingle edges are curled or shingle tabs are cupped
- Bald spots where granules are missing or granules are in the gutter
- Cracked shingles
- Sagging areas from leaks and water damage
- Dark streaks or stains on the underside or topside of the roof
- Moss or algae growth or buildup
- Daylight can be seen through the roof boards in the attic
- Damaged chimney and roof flashing
HVAC Problems: This is harder to diagnose since the most common indicators require familiarity with the efficiency the current system.
- The system is 15 years or older
- Increased running time
- Loud noises
- Regular maintenance hasn’t been preformed (pilot light won’t stay lig, frayed or exposed wires and conduits, or other visible damage)
- Musty smells
Siding Problems: ProHome Services identifies seven warning signs to look for. our roofing and siding experts look for:
- Peeling paint or wallpaper or signs of mold or water damage inside the home or on the vinyl
- Holes in the siding are a huge problem
- Signs of rotting or warping siding
- Multiple pieces of loose or missing siding and missing nails could indicate serious underlying problems you will need to address
- Faded, worn siding might be an indication of age and might need to be replaced
Having a contractor walk the property with you to help you assess the repairs that will be needed might not always be possible. These are things you can look for before committing.