FROM OUR BLOG
May 20, 2016

For investors and real estate enthusiasts, Fix and Flip endeavors can be a profitable, enjoyable experience. For buyers however, it can turn into a home purchase that falls apart.

Scenario:

During the purchase process, an inspection is done of the property and the buyer discovers a number of repairs that need to be done.

The seller is not required to fix the problems, but the seller takes their sweet time and then reports: the repairs have been done.

Upon a second inspection, it’s evident that the “repairs” were sloppy and ineffective. The buyers might notice that a shower still leaks, another repair was “fixed” with duct tape, etc. In short, the seller simply does not care.

Buying a home is already challenging. A home-buyer doesn’t need the additional stress of a seller who isn’t invested in the quality of the home.

Ultimately, the buyer’s frustration winds up in a cancelled contract, and they must start all over in their home search.

5 things to do before buying a flipped home:

  1. ASK QUESTIONS – Work with your agent to get specifics about all the work that was previously done. The more forthcoming the seller is with information the better!
  2. THE DEVIL’S IN THE DETAILS – Many issues with these houses happen behind the scenes, masked by freshly painted walls. Take your time with a good inspector and examine possible structural problems in addition to noticeable ones. Some things you can look for: Cracks in the foundation, uneven floors, poorly built decks.
  3. INVESTIGATE AND MEASURE – Go through the house and open/shut all the doors and open/close all the drawers. Does everything work correctly and fit like it’s supposed to in order to function? If you need to supply your own washer and dryer, find the hook up location and examine the space around it. Is there enough room? Is this area in a logical place in the house?
  4. QUALITY CHECK – Look around and examine the types of materials used to fix up the house. If it’s poor quality, it’s also an indication of cutting costs behind the walls.
  5. DO YOUR HOMEWORK ON INSPECTORS – Find a highly rated inspector, and research the types of things inspectors look at. When you know what to look for, you can ask educated questions.

It’s possible to get a great home sold by an investor – just be educated and prepared!

We work with a number of agents specializing in these types of properties – let us know how we can help: 303-800-4595

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Sierra Pacific Mortgage Company, Inc.

Sierra Pacific Mortgage NMLS# 1788. Michael Shotnik NMLS: 218281, CO License: 100017466. Not licensed in Alaska or New York.  To check license status of mortgage loan originator, visit D.O.R.A. and NMLS consumer access.