Buying A House Flip? How To Get A Good Deal!
Have you ever been in a situation where you were looking at a house, noticed it was habitable but had a few problems, but was still close to purchasing the house and then changed your mind once you realized it was a “flipped” property?
If you have ever had this happen to you then you know how frustrating it can be. Unfortunately, it happens more often than you might think. However, if you realize a house is being flipped and you are still interested in the property there are some things that you can look out for and do to ensure you’re still getting a good deal.
Set Aside For Unforeseen Repairs
If you are looking to buy a home that is being flipped you really should go by the 20% rule. For example, if you are paying $500,000 for a house that you think needs a lot of work, it would be wise for you to set aside an extra $100,000 for repairs on said house. Likewise, if you are paying a hundred thousand for a home, you should set aside about $20,000.
Although it’s not always an automatic disqualification, be wary of for sale by owner situations. It really is better to go through a local real estate agent. Finally, on top of all this, you probably should give yourself a financial buffer. This is simply because it would be terrible to spend all of your money and then not have enough to pay the property taxes and other incidentals.
Get To Know The Resale History
You mainly want to know how often the home has been sold. Look for any quick sales with a significant uptick in price. Moreover, if the individual flipping the house is experienced, then they have a track record. Investigate other properties they have flipped and talk to the buyers.
They will be able to tell you if the house they bought still needed a lot of repairs after they purchase. Better safe than sorry. There are a lot of unscrupulous house flippers who will sell a home to an unsuspecting buyer and only do the bare minimum to make it livable.
Get To Know The House Up Close
This is also a pretty reliable sign of a flipped house simply because a house flipper will want to unload the house as quickly as possible. Making it appear attractive is one way to do that. That’s the bad news. However, the good news is that there are some house flippers out there that will offer you a stipend to have the house remade the way you want it. Before making any agreements, it would be worth your while to fully understand the stipend and what it will buy and what it won’t buy.
Determine What Changes Have Been Made
You need to determine what the history of the house is, because it will be another indicator to you of whether a home has been flipped or not. Along the same lines, it is also essential to determine whether your state is considered full disclosure or not. A full disclosure state requires an individual involved in home selling to disclose everything about a home, including what improvements they themselves have put into it.
Consider Hiring A Professional Home Inspector
Acquiring a professional home inspector is a wise move for all home selling aficionados, not just the ones who are considering a flipped house. Make sure to pick one who is licensed and experienced and not affiliated with the sellers in any way, shape or form. An experienced home inspector would be able to tell you if the sellers did a thorough job repairing the house or just one at the surface level.
By following these steps, you are sure to save yourself a lot of potential grief and second-guessing yourself about whether you should buy a flipped house or not. For assistance in buying a home or selling investment property, consult with a professional Realtor near you!