Flippin' Red Flags

[Alex Isringhausen]

I’m trying to build a 'red flag' list for when I start doing walkthroughs. Foundation issues and major sewer lines are at the top of my list. What’s one thing you found during a renovation that made you say, "I'm never buying a house with that problem again"?

[Bo Smith]

Foundation, sewer, and roof are the big ones for me -- those eat profit fast. But I've learned the hard way that bad electrical is a silent killer. We picked up a 1970s ranch last year where the panel was undersized and the whole place needed rewiring. We budgeted K for electrical. Ended up being 2K because the wiring was all over the place.

Honestly though, the worst red flag isn't structural -- it's when the neighborhood is declining. You can fix a foundation. You can't fix being in the wrong market. I've passed on deals with great bones in areas where median values were trending down year over year. Just not worth the risk.

What's your typical holdout price per square foot for finishing, or do you just skip the house entirely if the foundation's already sketchy?