Finding a good house to flip can feel like a hassle when you don’t know what to look for, but it is extremely important if you actually want to make a profit off of your flip. The last thing you want to do is purchase a house that has foundational issues, a bad roof, or anything else that you will spend your entire budget on – trust me, you don’t want to just break even in the end. Here are a few warning signs that Christina and I consider every time we are buying a house to flip.
The condition of the roof can be a huge deal-breaker, especially when you don’t have the budget to repair extensive damage. To get a better idea of the roof’s condition, ask the seller how old it is (although age doesn’t necessarily mean it’s a bad roof). Inspect the gutters and check for dry rot. Look for cracked or missing shingles. If any of these things are present, then this is a pretty good warning sign that the roof will need a lot of renovating. This isn’t necessarily a house to avoid, but to cover the cost of repairs, you might want to try working something out with the owner.
Plumbing is an important part of every house. Take a walk through the house and turn on the faucets in the kitchens and bathrooms, and flush the toilets. Make sure the drains work well and everything has good water pressure. While checking the house, if you come across water stains, sagging floors or mildew, then this is a sign of problems that need to be addressed. Defective toilets and sinks can give you reason to negotiate the price with the owner, but if the problems are pretty major, it might be worth reviewing your budget to see if it’s even practical to purchase this house.
OUTDATED ELECTRICAL SYSTEM
The electrical system in a house is just as important as the plumbing. Older homes often have outdated or bad electrical wiring, which can prove to be a huge fire hazard. Check the fuse box to make sure it is working properly and look for any exposed wiring. If major work needs to be done in order to replace or fix the wiring, then you might be better off walking away from this one. Outdated electrical systems are a lot of work to fix and they can be extremely expensive. Not always the best option, especially if you are just starting out.
MAJOR STRUCTURAL PROBLEMS
A house with structural problems can be complicated and expensive to fix. This can be a pretty big determining factor in whether you make a profit or break even. If the house has a cracked foundation or other serious problems, chances are it will need to be gutted and rebuilt. If you aren’t as experienced or have a small budget, this might be a house that’s better off avoiding.
Every house is going to need to have some type of repairs done. Some damages like holes in walls, weathered paint, ripped carpet, etc. will be a cinch to repair or replace. While others such as foundational issues and roofing problems can get more costly and complicated. Whether you want to take on a house that has costly damages is up to you, but just note that fixing a house with these types of damages will take a lot more time and money.