Houses to avoid when looking for a house to Flip

12 Replies

I'm starting to look for houses to flip and I'm curious what types of houses most investors try to avoid.  I know this is a broad question but just wondering what would be a deal breaker for people, such as a certain type of house, year built, size of kitchen... Right now I'm just trying to keep it simple, basic repairs and cosmetic fixes.  

The only houses I try to avoid are the ones that I think my buyers will try to avoid.  For example, high-crime areas, busy streets, outdated floor plans, loud neighbors with cars on blocks, etc.

That said, if you can get the house cheap enough -- so that you can resell at a discount as well -- even these things don't have to be deal killers.

Thanks for your reply.  Another question, what makes a house a great deal other than the an amazing price?  What features in a house make it stand out?

Originally posted by @Barrett Anderson :

Thanks for your reply.  Another question, what makes a house a great deal other than the an amazing price?  What features in a house make it stand out?

Same answer...whatever buyers are looking for...

Live in an area where there are lots of families, find houses in good school districts.  Live in an area where most houses don't have a lot of land, find a house with nice backyard.  Live in an area with older buyers, find a house that has fewer steps and master bedrooms on the main level.  Etc...

Very old houses in many cases can be trouble with electrical, plumbing, insulation and code violations.

Medium topendlogo gold med2Phil Z., TOP END Properties | 203‑936‑7776 | http://www.rehabhousesinct.com

There are things you can fix, and things you can't fix. Buyers who are choosy want good schools, so a house in a bad school district is less desirable. Crime is another thing that makes s house hard to sell. Bad neighbors are another. Other undesirable things include: industrial building next door (or close), railroad tracks close, freeways close, busy streets, flood prone areas, sinkhole areas. 

Pre 1978 houses can have code and environmental issues. J. Scott is on point. You need to know what your buyers want. And even after you find one that fits your buyers criterion, the numbers have to work to make it a deal.

Originally posted by @Barrett Anderson :

Thanks for your reply.  Another question, what makes a house a great deal other than the an amazing price?  What features in a house make it stand out?

 Price relative to the value is the only thing that makes it a great deal. Lots of other factors can make something a bad deal, see Steve Babiak's post. Only price can make it a good deal. 

A house can have grate features but if the price is too high for those features it is still a bad deal. This is another way of saying don't buy on emotion, it is the numbers that count.

That being said; you may see  value in intangible features that other investors do not and you may be able to capitalize on them in a way others do not see. 

One tip to being a good investor is seeing value that the end buyer will see that other investors do not see.

I Know it may sound like I am contradicting myself. I hope I made my point clearly.

Medium crab1 copyNed Carey, Crab Properties LLC | http://baltimorerealestateinvestingblog.com/

Here is one of the better lists I've found:

  • House that's too small by today's standards
  • Busy street 
  • Small Master Bedroom
  • War Zone
  • No Garage
  • Functionally obsolete
  • Bad Lot
  • Junk neighbors

Credit:  Robyn Thompson

@Dan Costantino  a friend of mine wants to take Robyn Thompson course and I do not know what to tell her.  Did you take her course and if so was it worth your time and money?

What's her skill level?

I owe a lot to her 2k boot camp. I also did her mentorship.  Like anything else, you get out of it what you put into it. 

Stay away from HOAs. 

Great houses or great problems? One pays more than the other.