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09/21/2017 12:00 AMIf HGTV is included in your cable subscription, chances are you've watched one of their house flipping shows and thought to yourself, "I can do that." The appeal of the flip is no doubt enticing, whether it be for personal use or to turn a profit. But how can you tell if you got a steal with a house that needs flipping or if you will end up overspending on renovations?
Lauren Freedman, realtor at Coldwell Banker and house flipper, has faced this problem in the past.
"I have definitely bought properties that I thought would flip really quickly and ended up sitting on the market for months and months and months," says Freedman.
And that is not a great return on her investment. So, there are important qualities and steps to consider when looking for a house to flip.
Terri Miconi of Bureau Home Inspections in Branford says there is a great deal to consider when inspecting a house. Some issues can be signs of larger problems to come in the future and are important to watch out for.
"A lot of things come into play, starting with the foundation," says Miconi. "A house with a failing foundation will eventually affect other aspects of the structure."
The factors to look for to see whether the foundation is failing, according to Miconi, include water intrusion, cracks in the walls and floor of the foundation, leaning foundation, and efflorescence (those white stains that appear on concrete or masonry walls).
Some homes do not have a foundation but a pier and beam construction. It is important, Miconi says, to make sure that these are structurally sound. Crawlspaces need to be checked to make sure they are properly ventilated and insulated. She also says that any dirt floors must have a vapor barrier. Also, she says the basement and crawlspace of any house has to be checked for wood-destroying insects.
"Failing foundations can cause serious structural damage to the home," says Miconi.
To spot any structural issues, Miconi says to look for certain signs, including windows or doors that are not opening or closing properly and cracked walls. She says that if any of these signs of issues are identified then it is imperative to call a structural engineer that can evaluate the home for you and estimate what it would cost to make such repairs.
"It is important to have a licensed, experienced home inspector to do a thorough inspection before purchasing the home or it could cost you in the end," says Miconi.
Freedman always checks for a couple particular features when she begins the process.
"I look for something that has potential with good structure and good location," says Freedman. "Everything else is changeable."
John Hardy of John Hardy Roofing flips houses, as well. He also looks for location before anything else. He says that location is the most important feature.
"You look for a place you'd want to live and it's a matter of fixing the house," says Hardy. "You're shooting yourself in the foot if you're fixing a house where no one wants to live."
Hardy says he sees flipping a house as really "rescuing" a house.
"The way we do it, we basically move into houses and live there for a couple of years," says Hardy. "We look at a house that's way undervalued and needs TLC - and we can do the majority of it."
Freedman flipped her first home when she bought her own condominium at age 18 and says she knew she would get more value out of a house she worked on herself than she would if she spent extra money on a recently renovated home.
"I found a good deal and thought to myself I'd rather put my own money into it to make it mine," says Freedman. "At that time, I didn't know any better as far as what things cost, but now 10 years later I could walk into a 2,000-square foot house and basically tell you right off the bat how much it would cost to renovate just from my experience."
Now, Freedman says she likes to be involved with every aspect of a renovation. She likes to pick out everything going into a house while some people prefer to have a contractor making more of the decisions. She does, however, sometimes use a contractor.
"You also have to pick the right contractors. I have gone through about seven different contractors because they all handle things differently and you want the work to be reputable," says Freedman.
Miconi says that though she personally is not a house flipper, she would start by considering a budget, the best neighborhood to buy and sell in - she said to check comparable sales in the last few months and also, like Freedman, says it is important to consider who your contractor is.
"Know your contractors so you know you're getting the best pricing and quality work," says Miconi.
Miconi recommends saving money on labor by completing tasks to improve the house on your own - if you are handy. If not, she says to leave it to the professionals.
"Try to save where you can because that's your profit, but don't put in the cheapest products because it will show," says Miconi.
The increased popularity of flipping houses has intensified the process, according to Freedman.
"There are so many people trying to do it, which is making the process so much more difficult because everything ends up being a bidding war," says Freedman. "It's a 24/7 job if you do it right."