While there are laundry lists of things to look for in a potential flip sometimes it may be easier to put together an immediate list of “no’s” for those who are new or just getting started flipping houses.
A home on a busy street (no matter how great it looks) is going to sit on the market longer. Buyers will be more reluctant to submit an offer and those you receive will be for lower than you want. There is a tendency for people to look at these houses and price the after repair value based upon a street or two over. The problem is that a house not on a busy street isn’t truly a comparable sale. Always remember the first principle of real estate is location location location. A busy street is something that will not change and will affect resale.
Bedrooms that aren’t really bedrooms
Bedrooms that are small or that can only be accessed by walking through another room to get there are not legal bedrooms. While these types of spaces may account for overall finished square footage they affect the bedroom count which is how they are listed and how the rooms are used. Both key to buyers.
Houses that are tiny lack the potential to add value. From a space perspective they are simply limited. And there are less buyers looking for these types of homes.
Bowing walls, crooked floors, cracking walls, uneven staircases and floors….sagging…these are all signs of settling. While they may be able to be fixed, when it comes to a flip, you are better off passing. Especially when you are just getting started. The extra time, money and uncertainty isn’t worth it.
Houses in a War Zone
If you are uncomfortable working in an area imagine what will happen when its time to sell? Agents and buyers may not be comfortable in unsafe areas. The same goes for contractors. The risk for theft and vandalism is much higher. The condition of these houses is often so bad that the amount of repairs required to make them habitable would exceed the price you would be able to sell the house for.
No Garage (and no way to add one)
You don’t ever want to be the house with something that buyers may want and that is not ever a possibility.
Lots that are smaller than typical are less desirable. Strange size, strange shape, smaller than typical, or something oddly different about it. Add to that houses that back to unsightly surroundings or hospitals or nursing facilities or other commercial buildings. Even delivery truck traffic can impact resale.
No matter how stunning your renivation is there is nothing that can overcome a bad view from the neighbors. Deferred maintanance, personal belongings, broken down vehicles. It all makes a difference. When buyers come to view your house they are looking on the entire block but they are paying special attention to the houses right next to yours. Don’t talk yourself into it by saying it wont matter…it does.
Poor Layout (Better off tearing it down)
Low ceiling height, strange steps, weird basements. Go ahead and pass on anything that you look at and are confused by or think it would cost a ton of money and or time to fix this.
When you buy a house to flip you make your profit when you buy. Make sure that you are setting yourself up for a successful flip by using this guide to narrow down your selection easily and quickly. Spend time choosing houses that have certain characteristics that can be highlighted and will translate into homes that buyers want.
Want to buy a property and renovate it?
I have a freebie checklist that will help you — 8 Things I look for When Purchasing a Home. Just click here to download it.
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