Investors doing poor rehabs for a quick sale
This is really bothersome but to be expected. I just cancelled a contract on a property I was planning to purchase because as time progressed we discovered so many defects on construction. Poor craftsmanship, lazy communication by the seller's agent, and the lack of negotiation to make it a win win tipped it for me.
Story: Great looking property close to an area of attraction, it fit perfectly in my portfolio plans. At first glance it appeared to be a good build, a safe location (we spoke to the neighbors, visited the place at day time and night), and was inundated with numerous offers immediately it was listed. We made an offer as did lots of others. That was before we noticed the vinyl flooring was peeling off the surface. The seller's agent was notified and he claimed he sent someone to fix it. The rest of the time was spent trying to get them to installed the gas meter before appraisal and inspection. This week I went to look at the property again and this time the peeling was all over the place. My contractor revealed they had simply slapped glue underneath the cheapest and thinnest vinyl on a surface that wasn't sanded and even. Basically, they had hoped whatever they did would hold enough for the house to be bought off. Only the delay by the city revealed the cracks.
We headed to the backyard to discuss what i wanted done to the property in the near future (yes, I still wanted to believe the property was worthwhile). What we saw stopped us in our tracks: the AC condenser was missing! Apparently it wasn't difficult to do so since the iron cage it was supposed to be "safe" in was so flimsy I could lift it off the ground. None of us were surprised it happened since the house screamed vacant with its tall unkept lawn and a large For Sale sign at the front.
We tried to negotiate a floor and AC repair and replacement to be credited at closing but they insisted on fixing it themselves. We wanted to handle it because this was the third time they had sent someone to "fix" the floor.
Finally I have to stop and accept I had broken one of my cardinal mottos: Never be unable to walk away from a property. A lot earlier should have pulled me towards walking away: a seller who doesn't care enough for his property to keep it tidy, an agent who takes sometimes 24 hours to respond to a simple email, an agent who confessed he had not visited the property, and the constant excuse given on why the gas meter was taking soooo long to be installed (it was the cities fault they say). I pulled out.
The sad thing is someone is going to buy this property from the multiple offers received. The seller's agent hinted at that when we reported our findings.
So buyers beware. A lot of lipstick rehabs going on in this seller's market. Fear of missing out or a house in a desirable location can cause many to be stuck with a liability. Some rehabbers know their work is shoddy and that's why they push for cash buyers to close quickly. If you are a beginner investor like me get a good contractor on your team and don't talk them out of telling you the truth on a property you think is perfect. Don't fall for crap in this market full of people trying to cash in on this current frenzy. After all is said and done, everyone will leave the table and you will be the one paying the mortgage on a headache. Be willing to walk away. Another shinny object will present itself.
I'm glad I'm went through this. i'm learning what to look out for as i gain experience.