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Would You Buy a Flip?

Posted by StellaMarie (My Page) on
Mon, Dec 16, 13 at 11:41

Obviously this is a very generic question and there are a lot of variables. :)

I'm guessing that most of us wouldn't buy an obviously poorly done flip. However, would you purchase one that seems to have been fairly well done?

I'm looking at houses in New England, generally older homes. I viewed a couple of 50s-60s era places that were obvious flips. The renos seemed to be pretty well done. One in particular had all the right things, though they cut a few corners that I thought could have been done better (for example, in one the fridge was too small and they should've sprung for a taller counter-depth fridge (or simply done a better job planning the new kitchen so that it could accomodate a standard fridge), and the highly visible central stairs to the basement were low quality, painted white). There were a few more picky items, but no real red flags.

The realtor I was with viewed the full reno as a good thing (it really was all new). I viewed it with a lot of trepidation.

At the end of the day, I'll probably fall for an older, draftier but more charming house. But I'm curious as to how others view houses that are obvious flips.

On the one hand, if they're done well, it seems to be a good thing for everyone. Buyers get nice, updated move-in-ready houses, and sellers (hopefully licensed contractors) make a profit. And we're not tearing down perfectly good houses that need some updates. :) And who is to say that the contractors' work is of any lesser quality than a new build, or a family home that has been updated and maintained over time?

Have I just watched too much TV? Obviously, I wouldn't go for a (visibly!) poorly done flip. But even flips that seem nice on the surface make me nervous. Who knows what corners have been cut and what lurks beneath?

I bought my current home from a couple who had been in it for 20 years and maintained it really well. It's fairly old (almost 100 years), so of course there are ongoing maintenance issues, but I felt good buying a house that really seemed to have been cared for by people who made decisions with a longer view (i.e., they wanted to live in it forever, not get it good enough to flip).

Thoughts?


Follow-Up Postings:

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RE: Would You Buy a Flip?

I guess you could say I live in a flip. We bought our home over 25 years ago. The seller bought the house at a foreclosure auction for cash. He put a roof on most of the house. I'm not sure if he did anything else. We paid over double what he bought the house for. The house did not sell right away. Other than paying the taxes and maybe mowing the lawn he didn't do anything to maintain the house for the year and a half he owned it. All utilities were turned off. He made a profit. I wish we had the ability at the time to buy the house ourselves from the auction but we had no cash.

After all that I would not hesitate to buy another but would be more careful in what I paid for it. I think the issue for many flips is the low quality finishes and choices that are made. Someone flipping a house is not going to be concerned about the kitchen layout. I'm a 99.9% sure than ANY house I buy will require a full kitchen remodel as I have been ruined by the kitchen forum ; )


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RE: Would You Buy a Flip?

I'd approach a flip with caution, but I wouldn't rule a house out just because it was a flip. In my area, your main choice is between solidly built older (1820-1950s) houses, and more modern, newer, not-so-well-built houses. And there are a lot of older houses in the area, so more choice than if buying a newer home.

The main problem for me is that I hate waste. So I would have a huge internal struggle to rip out something that was brand new, just not to my tastes. The waste would bother me.

The flip would have to be very carefully inspected. I'd want to know exactly what was updated and how. Around here, there are still homes with knob and tube wiring, ancient oil burners for heat, cast iron radiators. So I'd want to know which systems were changed/updated.

And the kitchen would probably be the sticking point. My brother bought a flip and it works for him as a single guy who doesn't cook complicated meals. But the oven door hits the side of the fridge when you open the oven, and it blocks a lower cabinet at the same time. The kitchen sink is tiny; there is no room to put a dish drainer on the counter. There's very little counter space at all.

But the kitchen has ceramic tile floors, granite counters, stainless appliances (although lower end), a built-in microwave.

There's a pantry area and bathroom with washer/dryer hook-ups off the kitchen. The entire space is very poorly designed. There's wasted space in the pantry area, the bathroom is cramped, the kitchen is cramped and awkward. It looks lovely, but it doesn't work well.

A few simple changes at the flipping stage would have made a huge difference, but now they would be very expensive.


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RE: Would You Buy a Flip?

Probably not. When you flip a house you are wanting to make the most profit that you can. Short cuts in building and using lesser materials may be the norm, imho. Flippers want to get in and out as soon as possible. I would buy an old home with good bones over a flip. We did just that. NancyLouise


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RE: Would You Buy a Flip?

No, I'd NEVER buy a flip. But, I've seen what types of shortcuts flippers do and still put a thin veneer of respectability over the crap. 95% of the time, it's a sugar coated overpriced turd marketed to a first time buyer who knows nothing at all and only sees "Pottery Barn chic". 5% of the time, the project was done by a first time flipper who confused doing a project for himself with a project that makes money. And he ends up losing money, and someone ends up getting something decent. But, the odds aren't in your favor.


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RE: Would You Buy a Flip?

A local RE agent told me that one of the local lenders wouldn't lend on flipped houses mainly because of a lack of permits.


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RE: Would You Buy a Flip?

Maybe. I wouldn't focus on the fact that it's a flip. I would focus on the house itself: does it meet our needs and is the price compared to the needed work within our budget?

I have to agree with GreenDesigns. Flippers know the hot buttons that will sell: stainless steel appliances, some cheap laminate, Pottery Barn paint colors, maybe a tile backsplash in the kitchen, etc.

I've seen a lot of flips. Most are cosmetic with just enough attention to maintenance of major systems to make a buyer feel comfortable.


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RE: Would You Buy a Flip?

I've seen tile floors put directly on the subfloor that were already cracking. I've seen wood floors installed that were cupping because the moisture issues in the crawlspace weren't addressed. I've seen mold coming back through the fresh coat of paint applied in the closet because they didn't put gutters on the house and that corner got water intrusion. I've seen a rusted out water heater painted to look new. I've seen new 3 prong outlet installed with knob and tube behind the walls. I've seen a patch fall out of a plaster wall that was nothing but about an inch of joint compound stuffed in there.

If you can name a deceptive cosmetic disguise, I've seen it in a flip house.

So, not just no, but HECK NO, I would never buy a flip!


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RE: Would You Buy a Flip?

The 'best' one I have seen was they skipped painting baseboard behind a chair. It was a regular chair that anyone could lift it with one hand.

I hate it when hearing people suggest home sellers 'just to install cheap carpet before putting the house on the market', what a "flipper' mentality!


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RE: Would You Buy a Flip?

I would never buy a flip. I haven't seen one that was done well, and that's only the stuff visible to the eye.


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RE: Would You Buy a Flip?

This may be a little OT, but with all these TV flipping shows, amateurs are getting the idea that they can make a bundle doing the same thing That is really dangerous to a buyer. I've even heard a radio commercial saying how to flip and what a goldmine it is, even for people with no experience. Yikes!


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RE: Would You Buy a Flip?

Wow, I guess I'm glad to hear that I'm not alone. I mean, I think a lot of those Mike Holmes/HGTV-type shows are staged, but it's really scary how much people cut corners and are, frankly, unethical.

You do the best you can with inspections, but I think a lot of these bigger infrastructure/mechanical issues may not show up on inspection.

I love house hunting -- I just tend to overthink everything. :)


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RE: Would You Buy a Flip?

I think you said it: " And who is to say that the contractors' work is of any lesser quality than a new build"? I've seen new builds that literally fell apart after 3-5 years, so, yes, a flip that involved mainly cosmetic or kitchen/bath updates may be more solidly built than a new built.


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RE: Would You Buy a Flip?

I wouldn't buy a flip and it is really a pain for us to find something we want to buy right now. Flippers have purchased what really should be knock downs and put just enough into them to make it no longer financially sound to knock down, but so poorly redone no longer financially sound to purchase and live in either ....


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RE: Would You Buy a Flip?

HollySprings wrote:
"I've seen tile floors put directly on the subfloor that were already cracking. I've seen wood floors installed that were cupping because the moisture issues in the crawlspace weren't addressed. I've seen mold coming back through the fresh coat of paint applied in the closet because they didn't put gutters on the house and that corner got water intrusion. I've seen a rusted out water heater painted to look new. I've seen new 3 prong outlet installed with knob and tube behind the walls. I've seen a patch fall out of a plaster wall that was nothing but about an inch of joint compound stuffed in there."

I 've seen this type of stuff in all types of homes.
To the OP... just consider each home on its own merit. The generalizations being made here, are just that.


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RE: Would You Buy a Flip?

I guess I am lucky to be living in a house that was designed and built by the first person who lived here. It was built in 1950, but has nice big closets, lots of storage and a good foundation. I like "older" homes that are well built, by not sold that everything has to be re-done.


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RE: Would You Buy a Flip?

I agree with NCREG, look at each house, don't generalize about a flip, you may lose out on the best house for you.

I have also seen cheap flips, but I've also seen high quality jobs which are perfect for those who want a turn key house.

We are all looking for different things. I've been surprised by many posters who only want new, this doesn't interest me. I like older, but to each his own.


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RE: Would You Buy a Flip?

I have bought flips ( no problems) and have flipped houses (the buyers have been happy).

The link below will tell you about what can happen with house, new construction.

Here is a link that might be useful: 2 floods! New House!


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RE: Would You Buy a Flip?

The word flip has created a certain image which may or may not be true. Not everyone that does "speculative" work on a house is doing shoddy work. People have been doing this for years before we used 'flip' to describe this. There are good flippers and there are bad flippers. Like any industry, you will find bad apples.

Where we live, there are contractors/speculators that buy old worn houses and completely redo the house down to the studs. They are done as speculative remodels since the contractors are doing it for money. They call these "studs out" remodels where we live. They have new electrical, plumbing, windows, floors, etc etc. There is very little remaining that is old. These are new houses inside of old shells. I couldn't tell you if corners were cut or not but we see these houses opened to the studs when we walk by them.

Are these flips or not? These are definitely NOT just cosmetic remodels.

These houses sell really fast where we live. We just had one a block from our house that sold for $800K the first week it was on the market. My guess is that the house was bought between 400K to 500K. They worked on this house for nearly a year. There was a lot of work done to it. The work seemed reasonable (at least what we can see of it) After all is said and done, the contractor may make a good living wage for a year but he is not making an outrageous some of money, IMHO.

These types of projects are not done by first time flippers. The scope of the project is such that the risk is too great that you won't finish. When you tear the house down to the studs, you have to know what you are doing to complete a project in a reasonable time.

These houses are very popular because most people do not have the time or the money to completely redo their house like that after they have buy an old house. Not everyone wants to live in half done house for the next decade of their lives. I have done that. I don't want to do that again. This allows them to live in a move in ready house.. If done well enough, I would buy these.

However, I would have to check out the reputation of the person doing the work before buying one of these. If the builder has a good track record, why not. Unfortunately, around here these houses get snapped up so fast, there is no time to check out anything before making an offer!

I have also seen poorly done cosmetic flips. I agree with the poster that you have to evaluate each house on its own merit.


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RE: Would You Buy a Flip?

In our neighborhood (also old), contractors often renovate to the studs to sell. Or even level to the basement and build up from there. I don't know why they stick to the orig footprint when they're not at max % lot coverage, probably has something to do with the granite bedrock situation.

I have noticed that these houses are quite popular and sell quickly for much above a comparable 'nice-old' house. I wouldn't necessarily call them flipped so much as re-built but wouldn't hesitate to buy one depending on the contractor who did them.

Except this house -- which the owners did rebuild from the ground up three years ago, but someone forgot to tell them not to build an exact replica of their 60 year old home! It's already come down $100K and will fall further.

Here is a link that might be useful: Rebuilt home


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RE: Would You Buy a Flip?

robotropolis, that is hilarious!


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RE: Would You Buy a Flip?

I would not buy a flipped house. I think it's a despicable way to make money.


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RE: Would You Buy a Flip?

WHAT??!!??
Please explain your rationale.


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RE: Would You Buy a Flip?

Depends who is flipping and the price range. I do a lot of flips. We never cut any corners. Install best quality solid hardwoods, granite, moen faucets etc etc. Believe me builders are the one who cut corners!!


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RE: Would You Buy a Flip?

There are principled and unprincipled people in all walks of life, as well as competent and incompetent ones. I don't believe that anyone can make a blanket statement that applies to all "flippers" or builders.

Having said that, I would be very concerned, whether buying a house that's been flipped or a new build, about the quality of construction and the things I can't see. The house we live in now we had built by a reputable builder, and we were involved in every stage of construction---we even did some of the work ourselves. Now, when we consider downsizing, I reflect on how I would hate to exchange a house which we know about as much as we possibly could about its construction and maintenance for one that we don't know as much about. We've talked about how we'd rather get something in poor condition that we could "flip" for ourselves and thereby have some confidence in the construction---not to mention using the finishes we prefer.


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RE: Would You Buy a Flip?

There's a couple in my town who buy older, usually Victorian, houses that are kind of rundown, but in a good neighborhood. They live in the house for a year or two while they fix it up. They work on modernizing the systems--electrical, heating, plumbing. They redo the kitchen and bathrooms, sometimes adding a bathroom, keeping with the style of the house. They refinish the floors and trim. Repaint and freshen up each room. Repair the outside as necessary, and paint. Add a garage if it's not there already.

Then they sell the house for a lot more than they paid for it and move on to the next house. I think they've done 10-12 houses by now.

Someone referred to them as "flippers" the other day and I was startled, because I don't see them as flipping the house, but lovingly restoring the house. I'd buy one of their houses in a heartbeat, but they only work on really big houses and I want a smaller place.


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RE: Would You Buy a Flip?

StellaMarie - I couldn't believe it was actually a rebuild but people in the neighborhood assured me it was leveled to the ground and the assessment took a huge jump three years ago.


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RE: Would You Buy a Flip?

Many homes are renovated by owners who probably have less competence than a typical flipper. Many homes are as is, with no renos, or if a homeowner has lived there for 25 years, they many have done updates 20 years ago, 10 years ago and last week. Who know who did the renovation, and most likely the materials used aren't super high-end.

Obviously, flippers are like any other business people, they want to profit on the risk and investment they make. They are no different than any other business person, some are competent and honest, some are fly by night and untrustworthy. If they are smart, they invest in updates that will add value to a home, most people won't pay more for a counter-depth fridge that costs $1000 more. Neither do most builders unless you are looking at very high-end homes.

Why anyone would think this is a dishonest way to make money is beyond me. Flippers purchase properties that are distressed and a drag on a neighborhood and fix them up so they are nice and livable. They sell them at fair market value, if they are overpriced, they don't sell them at all.

Do they make a profit? Yes, most of the time, but they could run into issues that make the property unprofitable, so they are taking a risk and spending lots of money and time fixing the property up. Are the neighbors better off with a dump in the neighborhood? I fail to see what is unethical in general about flipping property.

To answer your question, would I buy from a flipper, it would like any other house, depend on if I thought the house was a good value for the price and in a location I liked.


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RE: Would You Buy a Flip?

I agree that HGTV and other TV shows have made us wary of a house that has been flipped---and often rightly so. At the same time, how many home "improvements" have homeowners tackled during the years they live in a house without having any idea what they're doing. Sometimes it shows in their finish work, but what about the electrical or plumbing or structural issues that might not be as obvious? That's why, if we move, I would rather have a home that would need a lot of work so we could open up those walls and see what's inside them. Just another example of buyer beware, no matter who last owned or remodeled or built the house.

When I was a teenager, my best friend's father supported the family building homes. Sometimes he would buy some property and build a home and the family would move in for a few years while he built additional homes on the property which he had subdivided and developed. Eventually they would sell their home, as well, and start the process all over again. Her dad was a master carpenter---a true artist---and his homes were all custom made with beautiful features and attention to detail. So I guess he was a sort-of flipper, and I would have loved to live in a home he had built.


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RE: Would You Buy a Flip?

"At the same time, how many home "improvements" have homeowners tackled during the years they live in a house without having any idea what they're doing. Sometimes it shows in their finish work, but what about the electrical or plumbing or structural issues that might not be as obvious?"

One house I looked at had no heat in 2 of the 3 upstairs bedrooms. When I inquired about this, because the house was built in 1870, so there was a chance someone just decided those rooms didn't need heat, I found out that the current owner had done some DIY work in the house and in doing so, cut the ducts that led to those 2 rooms. Didn't think it necessary to fix it. In northern New Hampshire, where it can get a little chilly in winter.

And he was asking a pretty high price for the house even if it had been in full working condition. He was completely unwilling to budge on the price, too.

I was just grateful that I looked at the house in January. Had it been in June, I doubt I would have thought to ask, "Do all the rooms get heat?" And I'm not sure that would be caught on an inspection.


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RE: Would You Buy a Flip?

As with any other type of house, it's all about what the inspection reveals. And making sure there were permits is also important. Some people do cheap, short-cut renovations whether to a home they plan to stay in or a flip.


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