5 Hidden Problems to be Aware of When Buying a Distressed Property

Fix and flip investing pros love finding a good distressed property. These homes that other people see as eyesores, house flippers see as potential gold mines. In the current housing market, distressed properties can be hard to come by, so when one does come on the market, flippers are usually waiting to pounce. They have their house flipping loans in place, their plan for renovations, and their team of pros ready to get to work.

But all of that preparedness won’t amount to anything if the home has serious issues that will eat into your profits. When you invest in a distressed property, check for these issues which could eat up your residential rehab loans and leave you with thin margins, or worse, a loss:

• Cracks in the foundation

This is one of those standard problems that everyone knows to look for. But that doesn’t mean that a crack in the foundation can’t be easily missed. Make sure that you hire a qualified home inspector to give the entire property, including the foundation, a solid review. If you have experience in construction, it would also be a good idea for you to get under the house and take a look around for yourself. Two sets of eyes is always better than one.

• Wiring issues

No housing inspection would be complete without a check of the home’s electrical wiring. Watch out for homeowners who have taken it upon themselves to fix electrical issues without the help of qualified electricians. Problems with the wiring can be extremely expensive and difficult to fix. Make sure everything is in order before you invest.

• Water damage

Water damage is one of those problems that can cause a host of other problems. Have your housing inspector check carefully in bathrooms and the kitchen for any signs of leaks. Check for floorboards around sinks and tubs that feel springy when you step on them. You should also look under every sink to see if there any indications of drips or leaks. The walls of a room beneath an upstairs bathroom often hide water damage inside.

Some home inspectors won’t bother to check the attic or roof for leaks, but this can be a major oversight. If there are substantial leaks in the roof, that may require renovations that you simply can’t afford.

• Mold

Mold often goes hand-in-hand with water damage, but not always. Mold problems can cause significant health issues, so they are vital to find before you make a down payment. While mold sometimes has a distinctive smell, it can also be odorless and hidden away in walls and flooring. Keep an eye out for black, green, white, gray, brown, orange, pink, and purple discoloring. Any one of these colors could be a sign of mold.

• Termites

Most bug problems can be resolved by an exterminator, but termites can cause significant structural problems. Extensive termite damage could compromise the structural integrity of a house, requiring major renovations. Carpenter ants can also cause serious problems. Have your home inspector check for piles of wood shavings, rustling noises in the walls, and mud-like materials in the basement, attic, and crawlspaces. These could be termite hives.