4 Ways to Identify a Quality House Flip

House flipping has become a popular practice in recent years. Investors purchase older, often rundown homes and restore them to their former glory with a little DIY magic. While these stories make for good television, they don’t always have a happy ending for the buyer though — in the real world, quick flips can correspond with shoddy workmanship.

How can you spot a quality flip while you’re out house hunting? Here are a few ways:

1. Work with a reputable agent.

The best way to avoid landing in a money pit is to partner with an experienced agent; ideally, someone who has worked with house flips before and is well aware of what constitutes quality and value.

They can fill the knowledge gap, help with due diligence and recommend appropriate inspections.

2. Study the history of the home.

These days, a relatively detailed history can be obtained via online listing sites. Verify the most recent purchase date to establish the current length of ownership. Compare the previous sales price to the current listing price. A brief period of ownership without a disclosed reason (e.g., divorce) and a significantly higher listing price could indicate that the property is a quick flip.

3. Research the seller.

Knowing who is selling the home can tell you a lot about the property. For example, LLCs who bulk buy properties at tax-lien auctions typically churn out low cost renovations for quick profits.

Individual investors are more likely to produce quality results and be able to answer questions about renovations, permits, etc.

4. Inspect common trouble spots. 

Low-quality flips tend to raise red flags, including:

• Mismatched fixtures, clogged drains and leaky plumbing
• Flickering lights and oddly placed electrical outlets
• Improperly sized HVAC units
• Multiple layers of roofing shingles
• Patchwork paint jobs (which may be used to cover visible damage)

Are you starting your homebuying journey or considering a new investment? Reach out to discuss your loan options.