Home flipping is increasing at a rate comparable to 2006, and some real estate pros are warning buyers to be cautious and do their homework before purchasing flips.
Be cautious about This With regards to Flips
“Some flippers are turning historic homes into modern, hybrid treasures, but others are slapping cosmetic fixes on truly troubled properties, ignoring mechanical and structural issues,” CNBC reports. “For more unsuspecting buyers, that move-in-ready dream home can quickly flip into a nightmare.”
Which was the situation for one buyer, Cameron McGuire, who’d purchased a three-bedroom, three-bathroom condo in Washington, D.C., that had been renovated by a local developer-flipper. Six months after moving in, McGuire received a phone call from a Washington, D.C., housing inspector who had been investigating claims against the developer by other buyers.
The inspector “gave us list after list after list of things that were either not permitted or violations or weren’t zoned correctly within the house,” McGuire told CNBC. “Receptacles are not permitted the way that they’re installed here. The canned lighting up in the ceiling is not permitted the way that it is supposed to be in here. … It was an unending list of things.” Permits for a back addition, including two bedrooms and two bathrooms, also hadn’t been filed, meaning that McGuire now must tear it down.
“It’s literally putting lipstick on a pig,” Stephen Carpenter-Israel, president of Buyer’s Edge, told CNBC about many home flips lately. “They’re just doing cosmetic stuff and actually covering up problems, and that’s scary because it’s very difficult to figure it out.”
CNBC provided a few of the following tips for buyers purchasing a flip:
Make sure the house flipper is actually a licensed contractor.
Request a list of all the work done and get receipts and warranty information.
Check for permits for the property.
Ensure all upgrades made pass full inspection
There are still some opportunities here in the Tampa Bay and Surrounding areas to purchase homes to be flipped. However you need to be extremely cautious. Having Nick & Cindy Davis assist you in ensuring the home dose not flip on top of you is crucial. To contact us simply call us at 813-300-7116 or click here and we will be in touch.