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When we were house shopping a few years back in the “starter” home market in San Diego I saw tons of “lip stick on a pig”. I have a general sense of construction working with my GC uncles in HS and college, and quickly realized flippers don’t fix problems they come across like they do on the TV shows?
Soft spots under new (cheap) laminate flooring, rotting pipes under a new sink/counter, and paint over termite damaged wood (big one here) were the most common ones. We opted for the dated house from the 60’s that the original owners may have updated sometime in the 80’s/early 90’s?
In fairness buying a dated house thinking you can do this or that can end up being a money pit vs buying one updated for many homebuyers? I’ve done a lot of work on our place (and have kept detailed expenses) and I could see how this could get out of control if someone didn’t have the skill set to do the work themselves and had to contract it out?
Well, if you wanted a house you could fix up then you should have looked at those.
We were shopping for a two bedroom townhouse for a disabled adult child. Three years ago we could find plenty of these that had belonged to old ladies and decorated with floral wallpaper and a kitchen filled with avocado green appliances. Often the children of the deceased old lady lived out of state and wanted to unload the place quickly. But we were not quite ready to pull the trigger three years ago, so started shopping about 15 months ago. The biggest issue we ran into out here in Arizona was competing against computer algorithms that found the cosmetic flips within an hour of the townhouse being listed online. Then the resources behind the AI offered a quick close and paid all in cash.
I haven't seen any property in a pre-flip state in over a year. They might be out there at other price points, but in the starter home or townhouse market, they simply vanished in the past twelve months. One place in particular stood out, my agent went to the assessors website to see who owned the property. Got sold within a day and then put back on the market 6 days later. It was OpenDoor that bought the property and flipped it that fast. Then had two OpenDoor agents as the listing agents. Made money off the flip and money off the sale and got a return on their investment within a month. Do enough volume like that and you can see the writing on the wall. It's obvious that they have a team of contractors that can pull off a cosmetic flip within 3-4 days.
After seeing 2-3 of these every week, from a buyer's perspective you got frustrated. Putting lipstick on a pig to flip for $40,000 more two weeks after the original purchase got old. May be different in other cities, but competing against computer AI for starter homes is tough.
I was hoping for something that I could fix up. Instead almost every starter home was bought and quickly flipped that I looked at.
Quote:
Originally Posted by North Beach Person
Well, if you wanted a house you could fix up then you should have looked at those.
Ok, Boomer. That sentiment irritates me to no end. Without a cash offer and ability to close in 48 hours that isn't an option. Believe me, I tried, several times.
This thread gives me a little hope that I don't have to do much on my home sale (which isn't for another 17 months or so). I hope you don't mind me piggy backing on this thread, but if I am reading things correct, it's better to sell a dated home than a cheaply renovated one. Correct?
I have a slightly dated townhome in a highly desirable place. I say slightly dated because I have fixed and updated things as needed. For example, in the case of the wallpaper which started peeling and looked really bad/unkept, I removed all of it and painted the walls. The previous owners also updated the master bath and installed hardwood on the middle level. But I still have builders grade in three of the four bathrooms. And the kitchen, while it has a the wood floor and granite countertops put in by the previous owners, it's still the original cabinets and footprint. I've replaced the appliances with new ones (nicer new ones rated highly by Consumer Reports) when the old wore out. So it looks nice and neat, but it's not "HGTV remodeled."
I've been watching the market around here for a while. I've seen houses that were flipped years ago when I moved in sell again recently for an average about $560k for a 2000sq ft townhouse. And they are contingent in a week or less. I keep wondering and worrying that my house should be updated too. I even asked for help here and got some mixed messages about not updating things vs. updating things.
I ended up leaning towards not "flipping my own house" because when I crunch the numbers, I just don't seem to get ahead by making unneeded improvements. It's always a loss even if I can sell the house for more. I think flippers must have connections to get cheaper labor or materials for a lower price.
I've been leaning towards the idea that it's better to sell the house not updated, but for less than the other houses that are updated. I figure when it's time to sell I just might move out, deep clean the places, leave enough furniture to make the place looked lived in, and have the carpets cleaned and the hardwood polished and walls painted and then try to sell for a price of about $520K-$530K. I figure it would cost me about $40k to do the updates to make my house like the updated ones... plus, another house, like mine, that wasn't updated at all (even as much as mine) sold for that price in two days more than a year ago. Another thought is, what if I asked for more and did money back somehow to the buyer so they could make the improvements they want. Although I am not sure how that would work with an appraisal. When it's time, I will ask the agent about that.
Based on this thread and how a lot of flipping is done on the cheap and people might not like it, am I on the right track in my thinking?
By the way, I just looked and Zillow estimates my home value at $581K as of today. Where on Earth do they come up with those numbers. There is just no way. It would b nice, but no way.
it's better to sell a dated home than a cheaply renovated one. Correct?
Yes
A lot of the problems described by other posters may not be so much due to flipped/not flipped properties, but the extreme shortage of listings in many areas of the country. The market has to loosen up considerably before buyers will start to be favored.
I sold my old house & bought another just before COVID hit. Both properties have increased in value by at least 10%. That's in one year with no improvements.
This thread gives me a little hope that I don't have to do much on my home sale (which isn't for another 17 months or so). I hope you don't mind me piggy backing on this thread, but if I am reading things correct, it's better to sell a dated home than a cheaply renovated one. Correct?
I have a slightly dated townhome in a highly desirable place. I say slightly dated because I have fixed and updated things as needed. For example, in the case of the wallpaper which started peeling and looked really bad/unkept, I removed all of it and painted the walls. The previous owners also updated the master bath and installed hardwood on the middle level. But I still have builders grade in three of the four bathrooms. And the kitchen, while it has a the wood floor and granite countertops put in by the previous owners, it's still the original cabinets and footprint. I've replaced the appliances with new ones (nicer new ones rated highly by Consumer Reports) when the old wore out. So it looks nice and neat, but it's not "HGTV remodeled."
I've been watching the market around here for a while. I've seen houses that were flipped years ago when I moved in sell again recently for an average about $560k for a 2000sq ft townhouse. And they are contingent in a week or less. I keep wondering and worrying that my house should be updated too. I even asked for help here and got some mixed messages about not updating things vs. updating things.
I ended up leaning towards not "flipping my own house" because when I crunch the numbers, I just don't seem to get ahead by making unneeded improvements. It's always a loss even if I can sell the house for more. I think flippers must have connections to get cheaper labor or materials for a lower price.
I've been leaning towards the idea that it's better to sell the house not updated, but for less than the other houses that are updated. I figure when it's time to sell I just might move out, deep clean the places, leave enough furniture to make the place looked lived in, and have the carpets cleaned and the hardwood polished and walls painted and then try to sell for a price of about $520K-$530K. I figure it would cost me about $40k to do the updates to make my house like the updated ones... plus, another house, like mine, that wasn't updated at all (even as much as mine) sold for that price in two days more than a year ago. Another thought is, what if I asked for more and did money back somehow to the buyer so they could make the improvements they want. Although I am not sure how that would work with an appraisal. When it's time, I will ask the agent about that.
Based on this thread and how a lot of flipping is done on the cheap and people might not like it, am I on the right track in my thinking?
By the way, I just looked and Zillow estimates my home value at $581K as of today. Where on Earth do they come up with those numbers. There is just no way. It would b nice, but no way.
Renovating slightly dated isn't going to gain you appreciation.
The real money in flipping property (or doing a nice renovation yourself) is starting out with a seriously dated property.
Ok, Boomer. That sentiment irritates me to no end. Without a cash offer and ability to close in 48 hours that isn't an option. Believe me, I tried, several times.
Ok Whiner. Don't give a **** what irritates you. You need to adjust your sights if you're not able to get what you want at your terms.
People look for a unicorn and then complain there aren't any.
(just for reference I know several people who buy fixers and flip them. I don't know any of them who can get a 48 hour turnaround for closing, and these guys have cash falling out of their pockets)
When we were house shopping a few years back in the “starter” home market in San Diego I saw tons of “lip stick on a pig”. I have a general sense of construction working with my GC uncles in HS and college, and quickly realized flippers don’t fix problems they come across like they do on the TV shows?
Soft spots under new (cheap) laminate flooring, rotting pipes under a new sink/counter, and paint over termite damaged wood (big one here) were the most common ones. We opted for the dated house from the 60’s that the original owners may have updated sometime in the 80’s/early 90’s?
In fairness buying a dated house thinking you can do this or that can end up being a money pit vs buying one updated for many homebuyers? I’ve done a lot of work on our place (and have kept detailed expenses) and I could see how this could get out of control if someone didn’t have the skill set to do the work themselves and had to contract it out?
A home inspection should find that kind of stuff even if the buyer doesn't notice it. I don't know how flippers get away with it.
I don't care about cheap fixtures I can change but covering up structural issues is a big no no.
My former strategy when I sold some older houses was fix everything, even the tiniest things, that were broken, stained, cracked loose, whatever- make sure it's done right, paint neutral but leave some of the quality vintage features intact. Clean and shine it up so it sparkles. I had an old interior door with a plain glass pane that was kind of ugly but a heavy, solid door. I changed the knob and put a stained glass insert in it and everyone loved that old door as a feature. Some people paint everything that is brown, white but I couldn't do that.
What I won't do is a full renovation, knowing I will not get that money back. The buyers get a break on price but not a Low ball one, they get a well maintained house and the option to renovate later but they get a fully functioning turn key home if they aren't a nitpicky HDTV fool.
Raising my hand over here....just bought our house 2.5 years ago it was a flip. And a cheap one. But a lot of issues arent going to be super apparent at first sight.
1) our HVAC was installed new (new units and duct as it had radiators and window units before), the units are undersized. The duct is poorly installed and inneficient. Our office which has 9 windows like a sun room has only 1 air outlet and it was installed in a crawl space area not our conditioned basement and uninsulated.
2) They installed new electric because there was old knob and tube. They put new outlets but left the old non functioning ones instead of reusing the existing locations.
3) they "painted" the hardwood floors instead of staining them. Looked good at the walk through but looked terrible once we started actually walking on them. We had them sanded and stained.
4) we have a center hall colonial so its living room through a doorway to the left and dining room to the right and stairs in front. The entryway area had tile. It slopped down on the sides, we thought the house had settled. It was actually 4 inches of thin set under it for no apparent reason AND the tiles werent even attached to it. When we removed them, after we got the 1st one out, the rest could just be picked up and removed, intact. So much so, that we reused the tile to tile the laundry room floor in the basement.
5)there was a roof leak in the office which we noticed at the walk through and asked to have it repaired before closing. They said yes. A year later part of the ceiling fell down and leaked because they didnt fix it, they just repaired the evidence and we didnt know until the sheetrock was so saturated that it fell down.
6)water poured through the kitchen ceiling around a light fixture because the upstairs bathroom drain wasnt properly sealed.
The most obvious way for us to tell, had we known to study it, is the tile installation. In every room with tile its poorly installed. The grout is missing, the tiles are loose. In the bathrooms the accent stripe isnt even with the tile, it either sticks out or sinks in. In the kitchen, the backsplash tile is uneven and has dried grout and morter everywhere.
Ok Whiner. Don't give a **** what irritates you. You need to adjust your sights if you're not able to get what you want at your terms.
People look for a unicorn and then complain there aren't any.
(just for reference I know several people who buy fixers and flip them. I don't know any of them who can get a 48 hour turnaround for closing, and these guys have cash falling out of their pockets)
I wasn't looking for a unicorn. I found many suitable properties. My loan officer (who also was a GC) confirmed that I could get financing on them. My offers were competitive with the selling price.
Older generations talk about first time homebuyers and comment that we don't want to build sweat equity. No, it's just that we don't get the opportunity.
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