Houston Home Inspector; Beware of the Flip House (Part 1)

I received a call a few days ago from a buyer who was quite excited about the house that she had just made an offer on. She mentioned that I would probably not find much wrong with the house because it had been completely renovated and everything appeared to be new.

A renovated home sounds good to a buyer, kind of feels like buying a new home without the new home price.

Unfortunately most sellers of homes don’t usually replace much, carpet and maybe a little paint. The current homeowner’s goals are, spending as little on their existing house, selling at the maximum price and leaving the closing table with enough money to buy a different house and improve the new one.

As a  Houston home inspector I usually need to pay particular attention to houses that have been completely renovated. This usually means the house was purchased by an investor as a flip. In these cases the investor knows that most of his/her repair budget will need to be spent on cosmetic items. Things like granite counter tops, new kitchen appliances, tile floors, new carpet and a little landscaping. The budget usually runs out when it comes to things like the HVAC system, the roof, foundation, electrical system, energy efficiency, etc. etc.

So when you walk into a rehab house the first thing you notice is how good it looks. It doesn’t take long after the inspection starts that you see all the items that should have been replaced but were not. You see most houses bought by investor’s were in such bad condition no one in their right mind would have even thought about buying them.

There is nothing wrong with the business of house flipping, you just need to be extra careful as a homebuyer about understanding what your buying. The best way to avoid a rehabbed money pit is hiring a Houston home inspector. We often joke about investors renovations as lipstick on a pig, because no matter how pretty the granite counter tops are the house may still be a pig.

So contrary to what you see on HGTV it really is difficult to make money flipping houses, if you make all the repairs needed. I should know, I’ve flipped a few myself.

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