Obviously, no home is perfect – especially ones you’re looking to renovate. But if I’ve learned one thing in my years of flipping, it’s this: some problems are bigger than you think and can completely ruin your chance of making a profit. Read on to see what I think are real red flags you should probably avoid.
Before you even go inside the home, make sure to walk around the exterior to check out the roof. While a few missing shingles, dark streaks, or mossy spots are unattractive, they’ll probably be relatively easy and inexpensive to fix as needed. A sagging roof, though, is a completely different story. Although roofs can sag for a number of different reasons (damaged breams, misplaced rafters, rotten sheathing), it’s usually a sign that you need an entire new roof (and might need to repair your framework, too), which won’t be cheap. This might not be a deal breaker, but it’s expensive, so it’s definitely something to keep in mind as you add up your rehab estimate.
Asbestos wasn’t banned until 1989, so it’s still pretty common in a lot of older buildings. Unfortunately, it’s also deadly – breathing in the fibers can lead to cancer, so you’ll obviously need to remove it if it’s present in any home you end up flipping. And sometimes it can be a bigger problem than you think: a good home inspector can point out what they think is asbestos, but you won’t know for sure unless you test it, so you could end up with asbestos without even knowing. Asbestos can also be just about anywhere (even in your floors) so removal can be time consuming and could also break your budget. Be careful.
As you walk around the house, keep an eye out for uneven floors. If they seem to be sinking toward one end of the house or toward the center, this is a major red flag. Uneven flooring is rarely caused by problems with the floor itself, but rather the foundation underneath, which will most likely have to be completely redone. If this is the case, I would probably pass on the home. Trust me – you don’t want to deal with the time consuming (and ridiculously expensive task) of lifting a home, removing the old foundation, and completely rebuilding a new one.
Unless the house is in the middle of the desert or on top of a hill, you need to consider the possibility of flooding. Take a look around the outside of the home. Has any work been done to divert water away from the house? If it hasn’t, are there any signs of previous floods or water stains in the basement, first floor, or garage? Previous damage can be expensive to repair, and making changes to prevent the same damage in the future can be costly, too. If you’re on a tight budget, you might want to pass on a home with improper drainage.
It’s not uncommon for older houses to have unwanted pests, but sometimes they can be more difficult to get rid of than you’d expect. If the home has mice, you might be able to set a few traps and fix the problem pretty quickly. Some animals, though, such as cockroaches, are more resilient and could require multiple visits from an exterminator and still be likely to return. And other pests like termites can chew through flooring and walls, leaving thousands of dollars of damage before they’re even detected. If you see any signs of pest infestation, no matter how small, don’t let it slide. This could cost you more than you think.