Question for Flippers: deal breakers when buying a house to flip?

Question

Hello Everyone!

I have a question for experienced flippers: When you're evaluating properties to flip, what are deal breakers that deter you from buying properties?

In other words, what are the major problems that make you walk away from a property and not even consider buying it? (i.e. foundation issues, termite damage, buried oil tank, flood zone, roof, etc).

My husband and I are looking for a property to rehab (either flip or BRRRR) and are looking for guidance on issues that we should steer clear of!

J Scott · Answer

1.  The numbers don't work.

2.  See #1.

J Scott · Answer

I used to think that way as well.  Then I realized that that, in any reasonable market, there are buyers for nearly any property at the right price.  You just need to figure out what that price is and then do a good job negotiating a purchase even lower.

Bad neighbors or next to an airport may seem like a deal breaker, but if you can get the property for $50K or $100K or $200K below market value, it may not be...  :-)

Tony Wooldridge · Answer

@Monica Evans, Disclaimer, I am not an experienced flipper and I am currently working on my 1st Flip as we speak.  However, one BIG thing that in my humble opinion you need to look at(besides the things that you and the our fellow colleagues have already mentioned) is if the space is functional and if not can you afford to make it that way.  The reason I bring this up is, I am struggling with a floor plan issue that I believe could have been avoided/ workout had I been more experienced and realized how code would effect my dealing with this space. So to answer your question functional obsolescence would be one to consider when purchasing a home.

I most certainly will know what to look for the next time. "Education is gained by reading the fine print, experience is gained when you do not!" Sometimes the best lessons learned are the hard ones! Thanks for allowing me to share.  Here is wishing you and your husband a successful 2017 in what ever direction you all chose to go!

P.S. I totally agree with @Jay Hinrichs, if you choose to flip homes I highly recommend reading @J Scott book it is more than helpful!

Jay Hinrichs · Answer

Buy J's book and all will be revealed    @J Scott      :)

J Scott · Answer

I only have one investing secret...and that was it!  :)

Alton Shady · Answer

Good evening @Monica Evans,

I am investing in the Tampa Bay, Florida market and one of the big things we recommend new investors to stay away from is sink hole properties. They can be an extremely expensive problem to fix, and they affect the retail value by 15% easily. If you and your husband are new to rehab work and/or don't have much construction experience, I would recommend staying away from properties that have foundation issues, and some of the largest rehab costs like extensive termite damage. Otherwise you can probably handle more than you think in terms of some water damage, moving walls, etc.

Good luck to you! Keep us updated on how things go :)- Alton Shady

Jay Hinrichs · Answer

@Alex Craig  I would pay a premium if I could live next t the airport were my plane was based :)

Nick C. · Answer

The only things that would deter us from buying is external factors; bad curb appeal, bad neighbors, next door to an airport, etc. Anything else can be fixed, and should have a price that makes sense.

Jay Hinrichs · Answer

@J Scott  well shoot  I was waiting for another pearl.. right when I think we have this licked.. we get our butt kicked.

Monica Evans · Answer

Hi Everyone,

Thanks so much for the thoughts and advice!! I really appreciate it! Will be sure to keep all of this in mind. :)

Question for Flippers: deal breakers when buying a house to flip?

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