Similar to a witch enticing children with a house made of gingerbread, cakes and candy, a property flip with the latest and most highly sought-after amenities could potentially conceal a slew of hidden problems.
Just because the hardwood floors are sparkling, the kitchen is decked out in granite and there are brand new stainless steel appliances, doesn’t mean costly structural issues or electrical problems do not exist.
Part of the reason buyers should be wary is that investors who purchase homes with the goal of flipping them are motivated to do so in the fastest way possible. This means applying popular fixes that not only can be completed easily but will also help to ensure the home sells quickly.
Maximizing the net profit and reducing the carrying costs associated with owning the home are paramount to most investors. The natural outcome of this economic reality is that sometimes, unfortunately, a rotten subfloor might not be considered a concern, so long as it’s solid enough to hold up some brand new travertine.
For lack of a better term, some of the more high-value and important fixes simply aren’t sexy. Updating the plumbing in a home can be an extremely expensive and time-consuming repair. Updating an electrical system is no different, but let’s face it - a Realtor who talks for too long about how the previous owner spent thousands changing the wiring from aluminum to copper almost certainly risks being met with blank stares and bored expressions from disinterested buyers.
If a beautiful granite backsplash is placed on top of a moldy wall, does the leaky pipe causing the problem really exist?
Patrick Stoy (NMLS Numbers 39527 and 39166) has 16 years of mortgage lending experience. Patrick is CEO of Wilmington-based Market Consulting Mortgage, which he started in 2005 with a mission to build lifelong customer relationships by providing real value. To learn more about Marketing Consulting Mortgage, visit www.macmtg.com. Patrick can be reached at [email protected] or 910-509-7105.