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Reno-to-Flip Homes, Part Two – The Cosmetics: Sizzle or fizzle?

by admin on May 22, 2011

What the heck is going on this year? In my 10 years as a home inspector, I’ve never seen so many “reno-to-flip” disasters on the market as I have seen this spring. If you’re buying a home that falls into the reno-to-flip category, you’ll have to use extra caution to ensure you’re not getting a prettied-up money pit.

The spring real estate market, traditionally the busiest of the year, sees an upswing in homes purchased in hot or trendy areas with the express purpose of renovating to resell for a profit. Perhaps it’s the preponderance of DIY and home renovation shows on TV that has lead to everyone and their uncle thinking they’re contractors or renovators. THEY’RE NOT!

What We All Want

It’s perfectly normal to want a house that’s been renovated, modern looking, and in move-in condition. Few want old, worn, and tired houses they may have to update right away just to suit their needs or to get insurance. The problem home buyers often encounter when buying reno-to-flip homes is that the finishes look great but the mechanics (and sometimes even the structure) of the house are in terrible condition.

It’s really very easy to spot a reno-to-flip – even the good ones – and your real estate agent should be able to quickly verify it for you by simply checking the sale history/activity of the house. Unfortunately, what’s much more difficult is spotting the bad ones (and then trying to determine just how “bad” bad really is).

Checklist

The very first thing to do is start with what you like best about the house. Do your darnedest to set aside your emotional attachment to the house and look at those finishes you love so much very carefully and closely. Does it really look like quality material was used? Pay particular attention to the items that really sell like kitchen cabinets and counters and bathroom fixtures and fittings.

The sad thing is, better quality materials really aren’t that much more expensive. Those that do use better materials are generally interested in providing a better product.

A quick trip to any major DIY store will prepare you to spot the difference between low-end kitchen cabinets and kitchen and bath plumbing fixtures from the better quality products. Those just interested in making the house look pretty to sell almost always buy the cheapest materials. This should be your first clue that all may not be as it seems. The sad thing is, better quality materials really aren’t that much more expensive. Those that do use better materials are generally interested in providing a better product.

Next you should look at the installation of these fixtures and finishes. How straight and square are those nice new cabinets? Granite countertops are pretty much a given today. How do the seams look? Did they choose the really thin stuff or are the counters full thickness? Pay particular attention to tile installation in both the kitchen and baths; not hard to do well but many screw this up. Misaligned tiles, bad end cuts, or cuts around protrusions like faucets and taps that are poorly done are indicative of amateur/poor workmanship.

What about lighting? Potlights are a must-have these days but can be easily screwed up – particularly in areas where you should expect insulation in the ceiling above (a good home inspector should be able to identify these serious fire-safety issues). How many outlets are in a room? A single outlet in bedrooms is woefully inadequate. It’s also one indicator that old and quite possibly uninsurable wiring may still be present. Are there GFCI protected outlets (those plugs with the two little buttons on them) anywhere near water (kitchens, baths, and outdoors)? What about smoke alarms? One on every floor is the law (and common sense). In a well renovated house, these will be hard-wired alarms.

The calling card of the reno-to-flip gang is to focus only on what sells: good looking kitchen and baths, new flooring and a lick of paint but ignore other expensive stuff like old/tired windows and doors. Original wood or sashless windows or old (generally crappy) metal fixed and sliding windows are expensive to replace and are therefore often ignored.

This is just a partial list of the really obvious signs of a poor reno-to-flip; the stuff that a home buyer, with only a bit of preparation, should be able to spot on his or her own. You just have to remember to look with a critical eye and to make sure you do your best to take emotion out of the equation.

Next time, in Part Three of Reno-to-Flip homes, I’ll talk about the really scary stuff – the screwed-up mechanics and the structural compromises that are most common in badly renovated homes.

The Complete Reno-to-Flip Homes Series

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