In the flipping business, you’ll often hear people say things like, “Any property is a good investment if you get it for the right price!” This might be true to an extent, but there’s a catch – the “right” price isn’t just a “cheap” or “below market value” price, it’s the price that allows you to make a substantial profit after you flip it. And sometimes, when a house needs so much work done, your flip will get pricey enough that you won’t make a profit regardless of how little money you bought the house for. So what are some expensive deal breakers that could make a home not worth your time? Keep reading to find out.
Lots of vacancies in the area
If you drive through the area where you’re thinking about buying a house and see a lot of empty, rundown properties, you might want to consider driving away and forget about it. If the neighborhood is in a decline, you’re going to have a hard time selling a house in it (regardless of how amazing your renovations are) because so many potential buyers will rule it out based on location alone. Even if the neighborhood is on its way up after some tough times, you’ll probably be competing with other investors and flippers when it comes time to sell, and that’s never fun, either. You’re better off looking for a better neighborhood where you’ll be able to sell fast.
Everyone knows asbestos is a problem, but flippers don’t often realize just how much trouble it can cause you. First of all, asbestos can be everywhere – in your walls, ceilings, and even floors. And whether you chose to keep it or remove it, it’s lose-lose. If you don’t remove it fully, (even if it’s not currently a danger and won’t be for years), buyers will use it as a bargaining chip. If you do go through with removing it, the process is time consuming and expensive, and sometimes you have to remove more than just the asbestos itself – when asbestos surrounds your pipes, you’ll usually have to replace all of your plumbing, too. In my experience, it’s just not worth it.
Uneven roof or flooring
Every home is going to have its problems – but an uneven roof or flooring are two of the most expensive issues around. Although roofs can uneven and saggy for a variety of reasons – rotten sheathing, misplaced rafters, or damaged beams, for example – you’ll probably need to replace the entire roof and framework underneath it, which isn’t cheap or easy. As far as uneven floors that sink toward one end of the house? This usually means there’s a problem with the foundation underneath the home, which means you’d had to tear everything up and completely redo it. If you’re not looking to break your budget, say no to homes with uneven floors and roofs.