There are a lot of different types of “house flippers” out there these days. Unfortunately, the way some of them flip houses might make you ask yourself, “Should I buy a flipped home?” When it comes to analyzing the process, it’s very simple. Investors buy houses dirt cheap, fix them up, and then sell them for a profit. As any business owner will tell you, it is necessary to keep costs as low as possible—along with getting the most money out of whatever it is that you sell—if you want to make any money.
Apply this reasoning to flipping a house for a profit and it might give you some second thoughts. Home flippers want to buy houses for the least amount of money possible, so the house is most likely in great disrepair when they start. They also need to get any necessary work done for the least amount possible, meaning they take the lowest bids they can get. The final step is selling it to you for the maximum amount possible. So you tell me: Should you buy a flipped home?
If you do consider buying a flipped home there are some very important things you must do in order to protect your interest:
- Do your homework. Check to see how much it was purchased for by the person selling it to you.
- Find out exactly what work was done. Ask if they got permits. Is the home in a historical district? If so, did they get the proper city approvals? Ask for before-and-after or progress pictures. Pretty much everybody takes pictures of everything they do these days. If they aren’t hiding anything from you then they shouldn’t mind sharing them with you.
- Get the home thoroughly inspected. A home inspector is a good start, but you may also want to pay a plumber, an electrician, an HVAC technician, as well as a roofer—at the bare minimum—to do a thorough inspection of the home you’re considering purchasing.
- Other considerations. Invest in a structural inspection of the home and a home energy audit.
All these things will cost you money, but they are prudent and essential if you are considering buying a flipped home.
Purchasing a flipped home is a situation where the buyer must beware. However, I also understand that flipped homes may be more budget-friendly than new construction. If you are considering the purchase of a flipped property, a home inspection is a critical step for your peace of mind. Contact Hunter Home Inspections to set up an appointment.
