Reno-to-Flip Homes, Part Three – The Mechanics

In part one of Reno-to-Flip Homes I talked about the open house. Part two focused on the cosmetics of the renovation; that is, the things that typically attract homebuyers to these houses in the first place – mostly shiny new kitchens and baths, some new flooring, freshly painted walls and lots of potlights. With the huge increase in reno-to-flip houses on the market this spring, be sure to read parts one and two of this blog series for suggestions on how to spot the shortcomings often found in bad flips and how to protect yourself from those flogging them.

Generally speaking, if the house doesn’t really cut it at the cosmetics stage (obvious signs of amateur work/installation or cheap material) you can be pretty sure it will really suck on the mechanics side.

In this final segment on Reno-to-Flip homes, we move on to the things most homebuyers usually can’t see or really wouldn’t know what to look for – the things that hold the house up, keep the water out, and make everything work (major mechanics and systems like heating, cooling, plumbing, and electrical).

Generally speaking, if the house doesn’t really cut it at the cosmetics stage (obvious signs of amateur work/installation or cheap material) you can be pretty sure it will really suck on the mechanics side. Unfortunately, the opposite is not always true – well done cosmetics does not necessarily translate into well done mechanics.

Top $$$

Usually the biggest (read most expensive) mechanical problems involve plumbing (particularly on the drainage side) and electrical deficiencies. These take the form of either old and frequently uninsurable wiring or downright dangerous amateur modifications, or both. Old, tired roofing – often flat roofs or areas not readily visible from grade – make up another big expense area common to bad renos.

Structural Modifications

What about structural modifications? These are usually the most difficult to spot and really require a high degree of knowledge and experience to identify. The most common structural change in older housing stock is the open concept first floor. Everyone wants the feel of large open spaces and, while doable, in bad reno-to-flips it’s often done poorly or wrong. Improper wall removal often leaves over-spanned joists that can lead to bouncy floors and cracked tiles down the road. Unusual sag or slope of floors (usually the second floor) can mean crucial support framing has been removed.

Improper basement underpinning (when floors are lowered) is another common structural concern that is very difficult to identify unless there are other structural ramifications stemming from it.

You’ll likely not know about these things until you’ve moved in if your inspector missed them (or if you dropped your home inspection condition from the offer).

Permits

With few exceptions, all of the items noted so far (except roofing) require permits to undertake. It’s been my experience that most reno-to-flips, good or bad, don’t have permits issued for the work done. That said, if permits were issued and are available you’re more likely to be in one of the better reno-to-flips.

HVAC

I’m least worried about old furnaces and air conditioners. Although a sign of a reno shortcut, these items are relatively easy to replace and for a reasonable amount of money.

Final Thoughts ..

The calibre of reno-to-flip houses on the market right now is generally so poor that it may be more accurate to use the term “reno-to-flop” instead. The bottom line is that most people really need a properly qualified home inspector to point out these concerns before they buy what may not only be a money pit but an unsafe place to live.

Unfortunately, many buyers continue to gamble with their hard-earned money. This is often because, in multiple offer situations common to the reno-to-flip market, they ‘re not willing to pay for an inspection on a house they might not even get. So what if you get the house? The real question should be, “Can you afford not to have an inspection?”

Now here’s the rub, How do you find a properly qualified home inspector? Stay tuned – that’s a topic for another blog.

The Complete Reno-to-flip Homes Series

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