I wasn't exactly sure how to title this post. I looked at a house to rehab and I had a little trouble determining what would be an acceptable tolerance for resale. When I talk about tolerance, what I mean is the level of perfection of the finished project. I understand that the expected finishes will vary from market to market.
My partner and I are new and looking to do a few flips. We found a property that has an ARV of $110k and the asking price is $54k there is a new furnace and updated electrical. The house is in a blue collar neighborhood and was built in 1925. The house was bought by another rehabber and appears they tried to do a lot of the work themselves. The work was extremely poor. They butchered almost everything that they touched. The floors are substantially out of level (approximately 6"). One of the exterior walls has about a 6" inward bow. The owner cut several of the beam supports and added random 2x6s as floor joists. I am in the trades myself, and would never consider buying a personal residence that has dramatically out of level floors and significantly out of plumb walls. Being new to flipping, I am having a little bit of a hard time determining what level of repair needs to be done. I feel that floors would need to be leveled, but that will affect the roof once jacked up. I feel that the house should be in the condition that I wouldn't mind living in, but I'm not sure if that is the right mindset or not. I spoke with a framer I know and he said that it sounded like if could be a tear down. Im sure this is probably too involved to be our first flip, but I would like to hear everyone's thoughts so we can hopefully learn from this.
If a home has been flipped before and the rehab work is shoddy. I do not waste a moment of time, I run away from it.
I will go pull all permits if there are nothing new that is end of the my research. This is a candidate for a redtagged home.
The previous owner/flipper removed framing and caused floors to be 6" out and walls to bow. All of these items need to be addressed/fixed to a bare minimum current code/safety standards. No flipper should ever knowingly leave or fix something any less than that.
I would choose finishes based on the area and ARV, things like cabinets, counters, quality of fixtures can be budget conscious when dealing with lower ARV, however, never anything safety wise.
A $50,000 spread from purchase to ARV with the issues you noted sounds like this house is a bust unless you can get it for a song, and it isn't a full tear down.
@Randy Dulac Not a full tear down, sounds like a load bearing wall was removed causing the deflections. Check if it is indeed going to be a roof issue once you jack it. However, regardless of the result, I don’t think the spread is enough. You will just be buying a headache. The title is accurate, and level of finish is something that you will live in, or at least the same as the comps.
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