What is a flipper home?
Distressed homes are sometimes bought up by an investor(s) at a low price to then be “fixed up” to resell and make a profit. These investors figure in the cost of the purchase, cost of repairs and time to know what a realized gain could be. This can be very profitable. The homes generally look very nice to an untrained eye, first time home buyer, or any buyer or Realtor in general. I admit, they dress up the properties pretty well. However, from an inspectors point of view, some are far from nice.
Let me first off say, not all flippers are created equal. There are a few out there that do a good job and actually have a conscience and tend to repair the home in a proper fashion. However, many are not like this. The issue being these distraught homes are generally older, have some major issues and are in poor condition. Over the years, inspecting these flip homes we have found some mind blowing things. Some of the worst homes having over 30 defects in a report. On average there are 3-5 defects on a home. Granted not all defects are catastrophic, but none the less they are issues to be resolved.
Some flippers will hide the major problems and but to make sure the home looks “pretty”. This is a bad situation in the current market where people are buying homes without home inspections. These homes are generally priced as starter homes for buyers. They “look” so nice on the surface and are very appealing. We call this putting lipstick on a pig. Because they look so nice and this market is driving buyers not to get a home inspection, this could lead to a buyer having to deal with some major issues and may not have the money to make the repairs.
What we find inspecting these homes is the paint, flooring, kitchen, baths are all updated. What they do not repair are structural issues, like foundation, floor systems or the roof. From there usually the windows are deteriorated or rotted as well. Lets take a look at a few issues we’ve come across:
- Foundations: Flippers love to hide foundation issues. The are expensive to repair so it’s easier to hide it. They will drywall the walls as to hide the problems. One home we inspected had the lower portion of drywall replaced all the way around the foundation. This give indication there had been seepage and a mold issue. The basement windows were tilted inward indicating deflection on the wall (bowing). The outside had additional dirt spread around the home and a new patio indicating the ground sank by the home as the walls buckled inward. This will cost 1000’s to fix. A new home buyer will most likely not have the money for the repairs and is stuck with foundation in distress. Be careful, as a newly finished basement area (new carpet, paint, etc) can be a first indication there are foundation issues.
- Mold issues in the attic: A lot of times flippers will not correct any issues in the attic. From adding some insulation, improve venting or not repairing an improperly vented bath fan. This will cause the attic to condensate and most likely cause mildew issues, hence could cause health issues.
- Electrical: This is hit or miss, but most will not touch any issues within the electrical panel or if the panel is an old unsafe panel, they will leave it. Ungrounded outlets is a biggie, find this most of the time. Most have learned to be GFCI outlets in the proper locations, but the real bad flippers do not even do this.
- Roofing, Chimney and Leaks: Most will not improve any roofing issues. This is to expensive for them. They will hide leaks re-plastering and or new paint. Most leaks are detected in the attic and again, most don’t even address anything in the attic. Chimney are never repaired, usually in poor condition. Especially brick chimneys.
They all have there ways to cleverly conceal issues within the home to make a profit. To an untrained eye this could be catastrophic. We have came across a few bad ones, and they buyers were able to get out of their contracts, saving them $1000’s and years of heartache. You wan to buy a home to be happy and fix it up they way you want. But, buying a home with major structural defects could break the bank and more off, cause even further issues to the home. We can not stress enough for a home inspection. The cost is pennies compared to major repairs on these poor condition homes.