What To Know When Buying A Flipped House - YouTube

What to know when buying a flipped  house? I've done hundreds of deals  

and I know exactly where people are cutting  corners and what you need to look for.

In today's episode, what we're going to go  over is how to tell if a house was flipped  

correctly and what I mean is was it done right.  I'm going to give you certain things to look for,

whether corners were cut or shoddy work was  done. Stay tuned through the end and I'm going

to introduce somebody that is critical that you  bring on when buying a flipped house. First of all,

did they just do a hack job or did they hire a  general contractor to do the work? We get a lot  

of fly by night people that are doing bad jobs  that you want to pay attention to. You do not want  

to be buying one of those. Here's the things that  I look for when I'm looking at a house that maybe  

was being flipped. I want to know is the person  that did the job licensed and bonded? Did they  

do the job correctly? Is it more of an independent  person? Is he licensed and how many properties has  

he done? Are the things that they touched, do  they need permits? So, typically what I'll do  

also is I'll look at before and after photos. Maybe  you could find an old MLS photo versus the new  

where walls moved. If so, did you need a permit  to do that? Was it a structural wall? These are  

load-bearing. If it's load-bearing, these things  need to have new structural supports done and  

you'll need a structural engineer to sign off on  it. A lot of people just start removing things and  

they don't necessarily know if they can or cannot  be, that's why you need a licensed contractor  

or a structural engineer and or a permit for  all of these things. So, if you go into a house  

and you essentially see a lot of work done like  new electrical panel, you have new plumbing, walls

have been removed, HVAC systems, things like that,  maybe there's an addition, these are things that  

could hinder it if you go to sell this property  or you may be forced as the new owner to pull the

permits and do all these things so make sure you  check these things ahead of time versus getting  

yourself into a headache later. As an investor and  flipper myself, I know what to look for. You want to  

make sure you're looking for the finished product.  Are there big gaps? Do the doors not shut right? Do  

the cabinets not shut right? Are things off? You'll  start calculating these as you walk through the  

property. These are a sign of things that are done  behind the walls if you're seeing them in front.

If you're seeing issues as you walk through the  house, what you're not seeing is behind the walls  

and what kind of issues could be lying there. One  of the things that I like to do for the new owner  

is I put together a binder. This binder consists  of the contractors that we used. It consists of  

any permits that needed to be pulled, all of  the warranty paperwork. It could be the color  

palettes that we have throughout the house where  we bought these things, so they know and understand  

where their warranty paperwork is so if they ever  do have an issue, they could contact them directly  

versus contacting you and if you're looking  at a house that has that binder put together,  

it usually means that person's pretty organized  and has done this quite a few times. What I often  

ask for and what I recommend people do is pull the  last 4 or 5 properties that they've done, ask  

for them. You could also just look it up by their  LLC if they're flipping them under their LLC's,  

you could look up those and even contact those  people if needed. Ask for a referral. I gladly  

give people referrals to the properties I flip. In  fact, sometimes people people even say hey, if you  

have someone that is looking at buying one of your  properties, we'd be more than happy to talk to them.

If it's an older house, things that they've  replaced, has the electrical been updated?  

Is there a new panel? How much of the electrical  was replaced? Do they have photos of the stuff  

that was replaced? Plumbing. Plumbing is a big one.  Sometimes I see people, they rehab the entire house  

electrical everything and then they get to the  plumbing and they cut it short. They don't get  

rid of the galvanized metal leaving it cracked,  it could be brittle. I've made that mistake once,

I'll never do it again. Now, when I go in, I replace  the galvanized steel and make sure that we have  

brand new sleeves throughout the house and to the  street. What I recommend everybody do when they're  

buying a house that's been flipped, you want  to make sure that you hire an inspector to go  

through that house and inspect everything. They're  experts at this, they've done this before, they're  

going to catch stuff that you and your agent  have not. These people do this all day long, you  

want to do this for a few reasons. 1, you want to  determine if what you're buying is actually a good  

product or if you're going to have a headache  in the future. You don't want the headache and  

if there are issues, you want them fixed by the  contractor, by the seller prior to closing. Doing  

this is going to help you flesh out any potential  issues that are unforeseen, could be the things  

behind the walls, under the ground, in the ceiling,  that you cannot see. Hiring a licensed professional  

to come out and flush those things out is going  to help you in the long run. Some of the stuff  

that I see that I just don't understand is I'll  walk a property that's just being flipped and the  

floor is popping up or these all these different  things that are issues, the handles are falling off.

These are probably properties that you want  to avoid. I went to go buy a property one time,

it's under contract and I noticed there was an  addition done so I couldn't find any paperwork  

on it so I went down to the city to find out  that this addition was done without permits, that  

was a pretty decent size square footage of the  house so that had- that deal needed to be totally  

renegotiated and they did come down significantly  on the price. This is something you need to look at.

These are things that can potentially happen  so luckily by doing that and doing my due  

diligence, I was able to save a lot of money on  that and then turn it for a win in my favor later.

So, hey, I know some of you guys have been out  there looking at properties. Comment below on some  

of the craziest stuff that you've seen people do  when flipping a house in the finished products or  

lack of finished products that you've seen. So I'm  going to go back to the contractor because I think  

it's important. If the property's been flipped  and they hired a general contractor to be able  

to look at the work that that person's done and  look up their license and look at any complaints  

that they may have, these are things that if other  people are complaining about certain things, you're  

probably going to be complaining about them too.  Anyways, things to look for in the contractor  

when buying a house that's been flipped. So, some of  the stuff that I notice when I walk through houses  

and that I've seen throughout properties is maybe  the floor is popping up, baseboards coming off,

the doors don't even sometimes close correctly,  water is not working in some parts of the house,

windows don't close, maybe they even have  different types of paint on the same wall, 

not intentionally. And one of the craziest  things I saw was an addition that was done,  

it was permitted but it was at an angle  and so they just tiled it and kept going.

There's some crazy things that you see when  people flip houses and sometimes you could  

tell they just weren't paying attention to the  details. Maybe you're buying this property as a  

vacation rental. If that's the case, click on the  link below on how to make money with a vacation rental.