Would You Consider Buying A House That Is A Fix And Flip?
Aѕ soon аѕ I read thаt thе house received a complete remodel, I naturally assume іt іѕ a fix аnԁ flip, аnԁ I cross іt οff mу list.
I won't bυу fix аnԁ flips bесаυѕе thе seller іѕ someone іn business
tο mаkе a profit. Jυѕt Ɩіkе I won't bυу a used car frοm a dealer.
Whаt іѕ уουr opinion аbουt buying a fix аnԁ flip?
Why would you not buy a fix and flip?
New car dealerships make a profit. Regular home owners make a profit. Wal-Mart makes a profit (by the way, 6 out of the 10 richest people in America are Walton descendants). Every company makes a profit. The benefits for buying a flipped house grossly outweigh any aversion you may have.
A flipped house is often as nice as a brand new house. The structure is often repaired, new fixtures and appliances installed, and new or clean flooring throughout the house.
Every house that I flip is brought up to all current code requirements (something that most homeowners don’t bother with), usually increasing the overall electrical system to a modern standard. Good luck running a home office on a 1930’s electrical system. All brand new appliances come with 1 year or greater warranties, the same for new siding and roofs. Buy a home warranty when you purchase the house as a supplement, and you don’t have to worry about a thing.
I would consider it.
Your realtor should be able to give you several things that could help you decide if it’s worth it:
#1 (and most important) – does the asking price represent a fair price for the property in it’s condition today. Recent comparable solds are a good metric and I agree with the one of the other answers that new appliances come with warranties and having a new roof or new siding puts off very expensive maintenance.
#2 I’d want a list of what was changed/fixed. I’ve heard of people buying a house, putting a coat of paint on it and re-selling it for $100,000 more (that doesn’t happen anymore). I’d want the before/after pictures with a description of what was changed. Sometimes flippers add great value because they have good relationships with contractors and did the work for less than I could have it done for.
#3 a flipper makes the most money by understanding value and understanding how they add value to the process. They tend to make or break their own profit on a deal when they purchase it.
good luck!
The whole fix & flip analysis shouldn’t be something to concentrate on. What you should focus on is the equity you gain by purchasing the house. How much do you stand to gain in today’s market? How much below market value is it? Fix and flips can also be short sales, which allow buyers to quickly gain some equity. I also agree with the other two posts. Someone always stands to make a profit, just as you do making a wise investment in a home with lots of equity.
I think anyone who does it in this current real estate market needs their head examined. However, I don’t really see your logic in not buying the house in that situation. All businesses are set up to make a profit, otherwise they’d be charities. Do you refuse to buy anything from a store? Private owners can profit from a sale just as easily as someone who bought a house to flip it.
Agree with other post. Re-habing properties not necessarily bad since you can get some deals now but most pros doing it now with cash and don’t have to sell quickly to make their money. They do it in good rental markets. You have to do the numbers and be prepared for the worst case scenario. Don’t even contemplate doing this unless you already possess all the skills and tools to do the entire job yourself, because that’s the only way it will work.
If the home is a good value compared to other homes in the area then I would buy it. who the seller is is not a concern.