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7 Very Suspicious Signs You Are Buying A Flipped Property
I have nothing against flippers who buy fixer-uppers, add value with cosmetic remodeling works, and cash out within 6 months for a quick profit.
It’s what’s real estating is all about. People who do this for a living are just trying to maximize the profits they can obtain for their products.
In fact, some people DO want to buy houses that look great on the surface, but are not a little short on quality under the hood. They might have a budget to work within or just looking at a short term stay of less than 3 years.
Circumstances like these can make buying a house heavily based on it’s cosmetics justified.
However, if you are either an investor or a regular home buyer, flipped houses is something you’d want to avoid as badly as a 16 when playing Blackjack.
They often only look good on the outside. Major problems start to reveal themselves within 6 months. Then you realize that you have to make a decision of either forking out thousands of dollars for a long term fix, or continue spending “small” money continuously to keep any discomforts manageable on a month by month basis.
These “small” money are eventually going to add up
And I don’t know about you. But being the party left holding the short end of the stick will literally drive me crazy.
So what type of warning signs can you watch for to avoid being the source of a flipper’s quick cash?
1) Everything is new
It would be really odd if everything in a house including the appliances and fixtures are new… unless you are buying a newly built house of course…
A house with regular homeowners will be constantly be in a work-in-progress condition.
There will always be things that are new mixed with things that are old. This is why on my 8 year old TV console, sits a brand new smart television. And on my 20 year-old built in kitchen counter, stand a brand new flask.
I’m not saying that it is impossible for a house to have everything in mint condition. Some households do find it necessary to have furniture and electronics replaced every 6 months. Maybe they have nowhere else to spend their money.
But the typical family will simply not find that necessary.
A flipped house, especially one being listed by a professional flipper, will usually be in pristine condition.
2) No inhabitants
Agents and flippers are the best in using politically correct excuses for why an apartment is devoid of life. Questioning them will make you look like an obnoxious insensitive jerk.
They can come up with countless reasons (excuses) that you cannot argue with like:
- It was an inheritance
- The owners spend more time traveling for work than at home
- A new baby is on the way and a bigger house is required
- They are spending all their time at the in-laws to care for a sick parent
Players in the flipping game will obviously not live in the house as they already have a place of residence. Or maybe they know deep inside that it’s a total piece of junk packed in an impeccable gift box.
Upon your visit to an open house if anything seems to out of the ordinary, the odds are that it’s not ordinary.
The average homeowner can either practice home staging or not when selling. It is a tactic practiced by every type of seller. But for flippers, staging is a guarantee.
It’s just part of the 5-stage process to obtain maximum profits from a quick flip.
4) Perfect surfaces and finishes
As the key concept with flipping is to show that a house is worth more than it really is, you can expect to see perfection, or at least close to it, where ever your head turns.
There are ways you can tell whether these furniture and fixtures are really new or as old as time itself.
For example, open the kitchen cabinets with glossy new vinyl laminates to look inside. You can do the same with the built-in wardrobes. If you can see signs of deterioration from age, the chances are that you are looking at a classic cover up job.
Floors are also dead giveaways. They might look polished and slightly glossy. But flooring defects can tell a while different story.
Other areas of investigation include drywalls that are layered one over another, flooring built on top of an old layer of flooring, countertops on top of counter tops, etc.
5) Shingly roof
One of the favorite tricks flippers like to execute is to get the roof layered with another round of cheap low-grade shingles.
This can create a truly aesthetic look. But as you can probably predict, it is not going to last long.
If you see that the layering patterns of the shingles are weird, it was probably worked on. Or maybe you can tell that there are obviously more than 2 layers of them.
Putting too much weight on the ceiling is not really recommended for any house. Why would anyone do that?
Because it’s a quick fix?
6) Old systems
The one thing you are not going to find flippers do is replace the various systems in a house unless it has a gravely hazardous condition.
These things just costs too much. It’s just expenses taking bites into the profits.
Look at the basement, the boiler or furnace room, condition of hidden pipes and ductwork, etc.
These places offers clues as to the real condition of the house that can be totally contrary to what you see on the surface.
7) Recent transaction record
Actually this is just not a sign. This is the closest you can get to clear cut evidence.
And I refrain from saying 100% because there is always that 0.01% who need to undertake drastic transactions like these due to personal and financial setbacks.
The sales record history of the address should be filed somewhere. But a lot of inexperienced real estate buyers are not aware of it’s availability or simple do not know how to access this record.
This is when hiring a good realtor has it’s benefits. She should be able to help you obtain the history of transactions on record.
If you find that the last transaction was a year or less before the property was listed on the market again, surely you don’t need a genius to tell you what is going on.
There are times in life where a regular homeowner buys and sell a house within a year with legitimate non-speculative reasons. But they are few and far between.
In events like this, treat it as a flip property until it is proven otherwise.
The critical element to avoid becoming a victim of buying a lemon of a house is to be mindful and aware.
Many home buyers go about viewing and inspecting a house without the thought of being preyed upon. So they don’t put too much thought into it when seeing glowing new faucets and century old piping underneath it.
It just never occurred to them to watch out for these things.
So just be more aware when viewing houses that just seem too beautiful to be true. And the price just seems too much of a bargain to make sense. A flipper will give you a convincing reason why it’s on such a bargain price anyway.