We are home inspectors – here are the red flags to look out for when buying a home to flip

FLIPPING a house can be a great way to earn some extra cash.

However, there are some red flags you need to be aware of before making your purchase.

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These red flags can cause you to lose huge sums of money in unexpected expensesCredit: Getty

These red flags can cause you to lose huge sums of money in unforeseen expenses on a property.

This, in turn, could lead to a lower return on investment or a longer time in the market.

When salespeople say the sewers are working “well”

One red flag to be aware of is when sellers say sewers are working “well,” according to building inspector Scott Broussard of ProTect InSpection Services.

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Although salespeople may be telling the truth, you should always have your own plumber examine the pipes for your peace of mind.

If you don’t, you can end up with a pretty expensive repair on your hands.

According to HomeGuidethe average cost to repair the main sewer line is approximately $3,818.

A complete sewer line replacement costs $8,000 to $30,000 — or $50 to $200 per linear foot — depending on the length and width of sewer pipe needed.

It’s also important to have your plumber or home inspector look at the drainage system, because that’s where most problems are, such as leaks and clogs.

Mr. Broussard added to CNN“Most of the time, I can tell, even just looking at the house listing, if you see the cheap laminate flooring or the typical Ubatuba granite countertop.

“So I know it’s going to be difficult.”

Unlicensed work

While you are asking an inspector to visit the house, it is also a good time to ask for documents about the work that has been done on the house.

You want to see this documentation to ensure that all work was authorized and properly performed by a licensed professional.

Ian Mayer, owner of IM Home Inspections, told CNN: “We often see cut corners, usually in areas like electrical.

“People don’t want to pay top dollar for a licensed electrician, so they ask their uncle who knows a bit about electricity to come in and do some repairs.

“People want to add extra circuits but don’t wire them up properly, and that can be dangerous.”

Listing has been off-market for a short time

If it has only been in the hands of the previous owner for a few months, then you will want to do a more thorough examination of the house.

A short holding time most likely means that the previous owners took shortcuts and made only cheap cosmetic upgrades (e.g. cheap light fixtures, hardware, laminate floors and countertops) and ignored the larger repairs, such as replacing the heating system.

Mr Broussard said: “If I see it sold and it was relisted and completely remodeled within a few months, there’s no way they’ve done a good job.

“So it’s always a red flag when you see a short amount of time in between.”

What are the risks associated with house flipping?

There are two types of house flipping strategies: the first is to quickly buy and sell properties, hoping to capitalize on market gains.

Another strategy is to buy the property and figure out which renovations add the most value so you can sell it for a big profit.

Both of these approaches can be quite risky and many make common mistakes when doing this.

Also, if the market crashes, you may have to sell at a loss or end up with a property you don’t want.

So flipping houses and taking out various loans may not make sense for all types of buyers.

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