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Old 09-19-2016, 09:55 AM
 
14 posts, read 13,821 times
Reputation: 13

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Many nice towns in northern NJ have some history and are full of old homes. I'm starting to dip my toes into the market in a few of these towns, and I am seeing many homes that were sold within the past year, "flipped" with a gut renovation job, and then placed back on the market at a much higher price.

Of course there are a lot of TV shows that focus on flipping homes, and there seem to be many people who are making a living doing this to the old housing stock around here.

As a buyer, what do I need to be aware of when evaluating homes like this? Obviously some things are plainly visible, but what about the stuff behind the walls? Drywall thickness, insulation, etc.? What are the things that a flipper might be tempted to cut some corners on?

Is there anyone on the forums who "flip" homes in the area?
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Old 09-20-2016, 10:45 AM
 
3,305 posts, read 3,834,183 times
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Get a home inspector, they're going to be much more knowledgeable than anyone online.

That said, it's always the details. Getting a wall installed is easy, see if there are visible seams in the ceiling, check the millwork and see if that meets up, do the trims in the light fixtures install correctly, are electrical sockets wobbly or angled, do doors stick, do the seams in the carpet match, do ceiling fans wobble, does the sink have any leaks?

Details and fixes are costly and good work is expensive, if someone didn't bother to run a wet rag over that paint splotch from where the roller hit the ceiling fan they probably didn't do the rest of the job with care either.
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Old 09-20-2016, 11:11 AM
 
Location: NYC
20,550 posts, read 17,509,264 times
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I don't know what you're looking for, move in condition or fixer uppers. Imo the most important thing is the foundation and ensure the house isn't tipping over or sinking. Exterior material and age of insulation is what I look for. Just because the seller puts in some pink stuff doesn't say much about the air insulation externally. If seller has solar panels, make sure you find out the age and current lease on them. A lot of home owners are dumping homes that have solar on it because the early adopters have contract payments that are getting to them.

Then it comes down to price, I like to find fixer uppers that have problems that I can pin point and hammer on the price than a property the seller spent a lot on fixing and trying to pass over the cost.

No matter what, if a foundation is tipping or sinking that's a major no-no.
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Old 09-20-2016, 11:43 AM
 
1,041 posts, read 3,001,786 times
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be aware of a home filled with $99 Home Depot vanities and cheapo ubba tubba granite and stock cabinets that is flipped in 2-3 months for double what was paid for the original house.
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Old 09-20-2016, 03:11 PM
 
Location: Mid-Atlantic
32,768 posts, read 35,986,074 times
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Quote:
Originally Posted by TonyStarksNJ View Post
be aware of a home filled with $99 Home Depot vanities and cheapo ubba tubba granite and stock cabinets that is flipped in 2-3 months for double what was paid for the original house.
Double seems to be the golden number. That happened to a house in my former neighborhood.
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Old 09-20-2016, 05:21 PM
 
4,284 posts, read 10,721,884 times
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I wouldn't buy one just because I know someone else is making a substantial buck off of me. They wouldn't be doing it otherwise
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Old 09-20-2016, 10:52 PM
 
Location: Pennsylvania & New Jersey
1,548 posts, read 4,296,795 times
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In reply to OP's initial question:

Big ticket items to consider before buying a house needing rehab:
1) Abandoned underground oil tank?
2) Mold
3) Septic (in outer suburbs and rural areas)
4) Structural issues
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Old 09-20-2016, 10:54 PM
 
Location: Pennsylvania & New Jersey
1,548 posts, read 4,296,795 times
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In reply to buying a post-rehabbed flipper:

Sure, I'd consider buying a flipper! Here's why:

• I'm a good business manager but I'm not that handy. Therefore I either want to manage a gut rehab by hiring all of the right people to do the work OR I want a house in move-in condition. For non-DIY people like me, a moderate rehab can cost as much as a gut job! (BTDT)

• The owner of a post-rehab flipper is a motivated Seller! Every month that the house sits vacant is costing the owner a heap of $$$ in non-recoverable interest expenses, property tax expenses, insurance expenses, maintenance expenses, etc. Because most flippers are aware of their ongoing holding costs, post-rehab flips are often sold for a discount from the full market value.

• OF COURSE... hire an inspector to ensure that the work was done well and right.

I've always got any eye out for opportunity. Recently I looked at a big post-rehab house that was listed for a price that appeared undervalued. I expected poor craftsmanship but to my surprise the quality of workmanship was excellent! The problem was that the skilled contractor who did the job should have hired an architect to lay it out! His floor plan was beyond terrible!!! The cost to correct would be exorbitant, hence the house sits there unsold.
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Old 09-20-2016, 10:58 PM
 
Location: Pennsylvania & New Jersey
1,548 posts, read 4,296,795 times
Reputation: 1769
Quote:
Originally Posted by GiantRutgersfan View Post
I wouldn't buy one just because I know someone else is making a substantial buck off of me. They wouldn't be doing it otherwise
Not really. The person flipping the house is making a substantial buck off their time, money, and effort to make the house desirable again.
Wanna save that money for yourself? Fine... but DIY then!
If you're buying the house at a good price, what's wrong with the flipper making a living?
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Old 09-21-2016, 07:35 AM
 
4 posts, read 4,057 times
Reputation: 30
I have been house hunting in Westfield since February and have seen a lot of knockdown/new construction done on the cheap. They buy for $400k-$600k and go on market for $1.2-$1.5m. Apparently sellers are going direct to the builders knowing it's a knockdown with an all cash, no inspection transaction.

These houses all look the same with slight variations such as the garage on the left or right, window placement or roof peak variations. They put in the same cheap dark wood flooring, and quartz countertops. In two houses I saw, the front door stuck so bad the realtor had to put their body weight into them to close. They all have the same gray/white paint scheme, wainscoting, and coffered ceilings. It's a nice look, but when every new home looks the same, it really erases the charm of the town.

They are making lots of $$ from these. Yes, they put time and money into it, but the initial work has been done long ago when they are building cookie cutter homes reusing the same plans over and over.
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