What issues with a house will make you run from a wholsale deal?

26 Replies

When checking out a house, are there some serious issues that should tell me that the deal is going to cost A LOT of money?

1.  Foundation issues

2.  Code violations (illeagal additions)

3.  easement issues

etc..

Make sure you do your due dilligence when buying a house and take it out on price.  the bigger the problem the better the price when it comes to you buying it.  Cash or Wholesale.    If you see a problem that is of huge concern, get a better price.

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Thanks Gerald,

How will I spot code violations?

To spot code violations, got to city hall and talk to builder inspectors about possible house violations.

Depends, am I buying the wholesale deal or selling it? Those are two VERY different positions.

I'd say if it's a foundation issue i would run from it and that can be pricy and plus their tend to be surprises when construction begins with projects like that. 

The dreaded buried fuel oil tank ...

Further reading on buried oil tanks:

http://www.lmgtfy.com/?q=site%3Abiggerpockets.com%...

@Steve Babiak  Oh god, I've seen a buried oil tank found during a home renovation show on HGTV a number of years ago. Environmental engineers, heavy equipment, destroyed yards all the way around the house (because of course it's not buried where it's easy to yank out). And that was the good ending! They didn't find any leaks into the soil in the show I was watching, but I can't even begin to imagine how much that would cost. 

roof repairs are expensive

Electrical and plumbing issues can ruin a budget.  Try to stay away from properties with well and/or septic.

Originally posted by @Daniella Ortiz:

roof repairs are expensive

Sure, but the amounts are predictable - seems most everything I look at or buy has need for roof repairs, so I'm not deterred by that.  Just make a price adjustment on your offer to allow for that.

I have a possible deal, but part of the kitchen is sinking.  @Steve Babiak   do you think this will scare cash buyers? 

Steven

Ah, there is another thing I avoid - sinkholes.  @Steven Velez  if that house is in an area known for sinkholes, you might have that.  So first check for propensity for sinkholes there.  If not a sinkhole ares, then you have a foundation expert give you an idea of what it would cost to fix.

So I'm guessing a complete tear down & rebuild is not a good consideration on really bad damaged homes? But what if you get it dirt cheap? Say $10k on down.

Inspectors, and a great contractor that you can trust.  I bring my contractor with me when he can make it.  I also use a spreadsheet that my contractor and I went over, from kitchen to baseboards.  It is very detailed.  It gets me pretty dang close to the repair. I also always add 10% to my repair for the wth is that, repairs.  I was talking to another investor one time.  He was telling me that he bought this property and found that the water pipes were galvanized steel. The problem was back in the 80s when Houston was booming a lot of home builders was buying galvanized pipes, the outside was galvanized but the inside was not.  Which over time will rust.  It cost him 8k to replace all the plumbing on the property.  

It needs to be in the right location for me.

Originally posted by @Daniella Ortiz:

roof repairs are expensive

 Even worse, is a leaky roof might cause mold, something very difficult to get rid of and it can be dangerous to the health of those living there. 

Chinese drywall will definatly make me exit stage left!

Hi @Jordan Redar  ,

There can be a ton of stuff that could cost you a good amount. It really is hard to tell until you start demo. Obvious things are roof, foundation which could usually include doing some plumbing, termites could be a problem because its hard to know the extant of their damage, lead paint. Again, it is always good to have a contractor with you when you are looking at these properties because they might be able to catch something you don't see.

Good luck,

Andres J.

Location and functional obsolescence.

I recently passed up on a flip because the whole upstairs layout was odd and the ceiling height was 6' 6" and all the bedrooms were upstairs. I believe that would have drastically reduced my ARV and my pool of potential buyers. All the numbers made sense but I was worried it could have just sat on the market for too long, which I have seen before with odd featured properties.