4 Steps to Finding Your Dream and Avoiding a Disaster

 

We want to save you from making the same mistake we made.

A while ago, my husband, Jack, and I bought an investment property. It was redone with beautiful cabinets, fresh moldings, and modern fixtures. We got it for a good price and were excited about our purchase.

But the honeymoon ended six months later when the house needed a seemingly minor repair. We couldn’t believe what we found: three layers of sheetrock behind the walls! Sheetrock is a panel used for houses’ inside walls. Typically, it’s nailed directly to the house’s beams, then finished with paint. But in our home, the freshly painted sheetrock was just an outer facade covering layers of shoddy repairs and decrepit pipes and wires. It was like we bought a movie set, not a building! And a horror movie, at that.

Anything in the house that was exposed was new, but nothing behind it. It was awful. When we needed a simple plumbing or electrical repair, it could end up costing $5 or $10 grand! We would need the plumber to replace the whole line or the electrician to do a complete rewire.

Could we have avoided this mess? Yes! Now that we’re older and wiser, we know where we went wrong and what steps we should have taken. There are good reasons to consider a flipped home but be wary-there are sneaky people out there. A developer who wants to make quick money can skimp on materials and cut corners to get the house on the market sooner.

New York is full of charming older homes. If you’re considering one of them, here’s what we recommend:

1. Check out all the people involved with the home – For a flip, the character and reputation of the listing agent, developer (a.k.a flipper), and contractors all matter. A lot. Look them up on Angie’s List, Thumbtack, and the Better Business Bureau. Read their reviews.

You can ask the realtor about his or her experience with the developer and contractors. Is this their first time working together or the tenth? Are other buyers happy? There are no guarantees, but you’ll feel more confident if past clients were satisfied. It’s important to find professionals who care about their customers and aren’t only in it for the buck.

2. Ask for a list of ALL the updates and renovations – You don’t need a list of the painting and new carpet installations. That you can see for yourself. But did they update the structure, foundation, wiring, plumbing, insulation, or HVAC? While you’re at it, see if there’s any warranty information for new appliances.

You can ask either the realtor or the developer for this information. It’s a huge red flag if they drag their feet or don’t want to give it to you!

3. Research the property history – There’s so much valuable information on public record. For starters, how old is the property? When did the seller buy it? If the seller owned it for a very short time (90 days or less), that might be a red flag indicating a shoddy cover-up job.

4. Get a thorough home inspection – Not all home inspectors are created equal. If you’re considering a flip, it’s worth hiring a top inspector who has experience with older homes. The inspector should look beyond the surface of the house to its “bones” by using a thermal imager to examine pipes and wiring.  An experienced inspector will be sure to cover all the way down to the basement and up to the attic.

And do a thorough walk-through yourself, preferably with a knowledgeable realtor as an extra set of eyes. Watch out for tell-tale signs of poor workmanship, such as painted-over water stains or crooked doors.

If you follow all these steps and you’re satisfied with what you see, go for it! A flipped home can be a great choice since it’s:

·        Move-in ready

·        Available for immediate occupancy

·        Modern and updated.

About 1 in 10 of the homes we sell are flips. We look for homes that were fixed up by real owners, not “fix ‘n flip” people. Many times, there are good reasons to buy a flip: A couple buys a house in Brooklyn, guts it, redoes it to be their dream home, and then the wife decides she doesn’t want to move from Jersey anymore. Once, we listed a home that a contractor fixed up for his kids; he put his heart and soul into the house, but his kids lived out of the country and changed their minds about the move.

Those homes are the best purchases! They give you the best of all worlds. They have all the advantages of a flip, and none of the disadvantages since they were built with love.