what do we think of gut rehab flips?

[Anonymous]

Flips hide a multitude of problems. Just make sure you have an extra 30K and lots of time to redo the cheap steps. Do you really think people who flip use top quality (or any quality) products? Heard so many sob stories about this. I would pass.

[Anonymous]

Anonymous wrote:What difference does it make if it was gross and disgusting inside? It's been gutted! Probably just old with old cloth wiring, old plumbing, etc, All the walls, ceilings, windows, etc taken out and old wiring, plumbing replaced and new outlets/wiring put in. Electrical box upgraded so you fon't blow a fuse everytime you run the hair dryer and microwave at the same time. Some of these old houses have 1 outlet per room.

Better to get a gutted basically new house than some retrofitted DIY homeowners idea of a renovation.

When we bought a year ago, we looked at a bunch of flips. The problem is, I doubt they were actually "gutted." The kitchens and bathrooms were new, new appliances, but the electric panels weren't updated, so I highly doubt the wiring was replaced. In fact, in one flip, my spouse checked the outlets and *none* of them were grounded (there's a very simple tool to detect this).

While they usually upgraded the normal windows, bay windows were usually *not* upgraded (too expensive).

Those red flags made me highly suspicious. I doubt plumbing was fully replaced, but my guess is that they did only what they needed to do to get the new fixtures in place. Who knows what lurks beneath bath tubs and showers.

However, the houses that were renovated by homeowners who owned them for a decade or more were in better shape. Why? Because if they renovated something 10 years ago, they probably cared a lot more about the renovation than a flipper because they knew they were going to actually *live* there. Yes, you have to be careful with DIY stuff. But in general, there were far fewer red flags with properties retrofitted by the actual homeowners than with flipped properties.

[Anonymous]

Anonymous wrote:it depends because the flip might have forced the house to be brought up to code which was as win for us (all new electrical wiring,electrical panel, plumbings, sewer pipe to the street, insulation etc...)

It might have if everything was permitted. OP, I would go to the Montgomery County government site and check all the permits for the house you're interested in. Less than four months of ownership is a really short time to have done everything in the most kosher manner.

[Anonymous]

Anonymous wrote:And some of us homeowners in these <1930s DC houses spend a buttload of cash renovating them with the idea that we will keep living in them and demand top quality.

If you're 29 and your boyfriend Josh is 29 and you're just going to live in your Eckington / Trinidad / Truxton Circle / Petworth newly flipped rowhouse for 4 years, knock yourself out. You're moving to Arlington, anyway in 2017.

The cheap-ass materials THAT YOU CAN'T SEE will in fact last you for your 4 years. The PVC plumbling, the low-price sockets, the seconds-quality warped framing 2x4s holding up your killer backsplash even!

I'm serious, all this crap like the poorly flashed roof won't be your problem, because you'll be in the Yorktown pyramid the minute little Iris turns 4 years old.

But for those of you planning on staying for 10+, I'd keep looking for a property I could rehab **myself** with a general contractor.

Why would you buy trouble?

Hilarious summary of a large faction of buyers I think. I say this as someone that could fit that mold but bought a non-updated houses in upper NW because I was fearful of raising my children in a transitional neighborhood to begin with. We plan to update soon after living here a while. I would definitely be in the Arlington faction if I were buying after I had kids and I knew what a big deal it is to change neighborhoods and schools past a certain age.

[Anonymous]

Anonymous wrote:

Anonymous wrote:What difference does it make if it was gross and disgusting inside? It's been gutted! Probably just old with old cloth wiring, old plumbing, etc, All the walls, ceilings, windows, etc taken out and old wiring, plumbing replaced and new outlets/wiring put in. Electrical box upgraded so you fon't blow a fuse everytime you run the hair dryer and microwave at the same time. Some of these old houses have 1 outlet per room.

Better to get a gutted basically new house than some retrofitted DIY homeowners idea of a renovation.

When we bought a year ago, we looked at a bunch of flips. The problem is, I doubt they were actually "gutted." The kitchens and bathrooms were new, new appliances, but the electric panels weren't updated, so I highly doubt the wiring was replaced. In fact, in one flip, my spouse checked the outlets and *none* of them were grounded (there's a very simple tool to detect this).

While they usually upgraded the normal windows, bay windows were usually *not* upgraded (too expensive).

Those red flags made me highly suspicious. I doubt plumbing was fully replaced, but my guess is that they did only what they needed to do to get the new fixtures in place. Who knows what lurks beneath bath tubs and showers.

However, the houses that were renovated by homeowners who owned them for a decade or more were in better shape. Why? Because if they renovated something 10 years ago, they probably cared a lot more about the renovation than a flipper because they knew they were going to actually *live* there. Yes, you have to be careful with DIY stuff. But in general, there were far fewer red flags with properties retrofitted by the actual homeowners than with flipped properties.

Almost all home renovation is crap. It's either done by the homeowner (most people expect to upgrade from their 'starter' home etc), so they hired someone to spruce up their place, piecemeal and only repaired things when they replaced. So deferred maintenance and outdated systems stick around. No true top to bottom comprehensive repairs or upgrades are done, they just saving up to buy their 'forever' home and hiring cutrate unpermitted contractor.

Or it's a flipper, who just replaces all the finishes, and doubles the price. Oh god, that will be tale of woe. The backed up plumbing, low-water pressure, ungrounded outlets (which you can fool some tools with by shorting the ground to the positive terminal).

Way way better to buy a house and renovate with a reliable contractor and integrated home inspector under your watch. But for most housing stock in DC (all the 40s tract housing colonials), the real best option is to save up your pennies and do a tear-down.

[Anonymous]

If you have the capital and patience, it's better to buy a run-down place and find a reputable contractor to do a gut remodel (or tear down and find a reputable builder to build new). But it's easier to get a loan for an already rehabbed place, so . . . Slightly off topic, but I've heard that the 203 loans (where the remodel cost is built into your mortgage loan) are hard to get and hard to administer (lots of paperwork to get repairs paid for). Anyone have experience with them?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:What difference does it make if it was gross and disgusting inside? It's been gutted! Probably just old with old cloth wiring, old plumbing, etc, All the walls, ceilings, windows, etc taken out and old wiring, plumbing replaced and new outlets/wiring put in. Electrical box upgraded so you fon't blow a fuse everytime you run the hair dryer and microwave at the same time. Some of these old houses have 1 outlet per room.

Better to get a gutted basically new house than some retrofitted DIY homeowners idea of a renovation.

When we bought a year ago, we looked at a bunch of flips. The problem is, I doubt they were actually "gutted." The kitchens and bathrooms were new, new appliances, but the electric panels weren't updated, so I highly doubt the wiring was replaced. In fact, in one flip, my spouse checked the outlets and *none* of them were grounded (there's a very simple tool to detect this).

While they usually upgraded the normal windows, bay windows were usually *not* upgraded (too expensive).

Those red flags made me highly suspicious. I doubt plumbing was fully replaced, but my guess is that they did only what they needed to do to get the new fixtures in place. Who knows what lurks beneath bath tubs and showers.

However, the houses that were renovated by homeowners who owned them for a decade or more were in better shape. Why? Because if they renovated something 10 years ago, they probably cared a lot more about the renovation than a flipper because they knew they were going to actually *live* there. Yes, you have to be careful with DIY stuff. But in general, there were far fewer red flags with properties retrofitted by the actual homeowners than with flipped properties.

Almost all home renovation is crap. It's either done by the homeowner (most people expect to upgrade from their 'starter' home etc), so they hired someone to spruce up their place, piecemeal and only repaired things when they replaced. So deferred maintenance and outdated systems stick around. No true top to bottom comprehensive repairs or upgrades are done, they just saving up to buy their 'forever' home and hiring cutrate unpermitted contractor.

Or it's a flipper, who just replaces all the finishes, and doubles the price. Oh god, that will be tale of woe. The backed up plumbing, low-water pressure, ungrounded outlets (which you can fool some tools with by shorting the ground to the positive terminal).

Way way better to buy a house and renovate with a reliable contractor and integrated home inspector under your watch. But for most housing stock in DC (all the 40s tract housing colonials), the real best option is to save up your pennies and do a tear-down.

Very few people have the resources to do a tear-down, especially given that even just purchasing the rundown house and land is out of most buyers' budgets.

It's also very difficult for buyers in this market to actually get a good price on a house that needs a total renovation, because there are entirely too many cash investors intending on either flipping or tearing down.

When we bought, we looked to buy a foreclosure and do our own renovation, but the foreclosures were priced high for "regular" buyers. Cash buyers were able to get deals. So we gave up on that plan because the foreclosures were expensive for the amount of work they needed just to be livable.

We looked and looked. We looked at short sales, estate sales, regular sales. We even looked at one new property, but it was way out of our budget (and that was without any of the upgrades).

We ended up buying a house from a homeowner that has been updated over the years. It's always a risk. Even new construction is a risk, as we have friends who bought a brand new house and had basement problems from day 1 and had to fight with the builder to get things supposedly covered by warranty repaired.

I don't know what the solution is. There has to be a better way. Every one talks about the middle class and making things better for the middle class, but in this region especially, buying a modest house is very difficult for those truly in the middle class. They're priced out of the good school districts, and even in the lesser districts, they have to spend top dollar and still take on a lot of risk and uncertainty.

And while renting is always an option, it's equally difficult to find affordable rentals in this region for a middle class family.

But all of that said, I think ultimately flips generally are riskier than homes where the seller has lived there for at least a decade. Of course, that's a generalization. Not all flips are necessarily bad, and of course, there are homeowners who haven't properly maintained their house.

[Anonymous]

Anonymous wrote:If you have the capital and patience, it's better to buy a run-down place and find a reputable contractor to do a gut remodel (or tear down and find a reputable builder to build new). But it's easier to get a loan for an already rehabbed place, so . . . Slightly off topic, but I've heard that the 203 loans (where the remodel cost is built into your mortgage loan) are hard to get and hard to administer (lots of paperwork to get repairs paid for). Anyone have experience with them?

I'm the PP who just posted. We bought a year or so ago. When we first started looking, however, we looked at foreclosures and we looked into renovation loans. We got a lot of confused and conflicting information about them. One thing is for certain, not all lenders do them. So that narrows the pool greatly. The interest rates are slightly higher.

And you can't do any of the work yourself.

We gave up, mainly because we really had trouble finding foreclosures priced low enough to make it all work.

I did have a relative purchase a house with a renovation loan. It wasn't a foreclosure, more like an estate sale situation. But they had trouble. The house wouldn't appraise for the amount they needed to get the renovations they wanted, so they had to drastically scale down their renovations. It was tense. I suppose it all worked out in the end, but you have to be prepared for possible road bumps or perhaps not getting all of the things you want done. Basically, the appraisal takes into account the house's value plus the added value of your proposed renovations. It can be tricky.

[Anonymous]

Ugh, we almost bought a flip, although I was leery of doing so. Good thing we had a good inspector. We were first time buyers and kind of clueless...the shower was already leaking, there weer ungrounded outlets everywhere, but the real kicker was the mold in the basement, and the termite damage so severe that the inspector could push a screwdriver right through one of the floor joists.

[Anonymous]

flip = cheap

Don't do it, OP.

Increasingly, they are "investments" by overseas people. No thanks.

[Anonymous]

Anonymous wrote:

Anonymous wrote:it depends because the flip might have forced the house to be brought up to code which was as win for us (all new electrical wiring,electrical panel, plumbings, sewer pipe to the street, insulation etc...)

It might have if everything was permitted. OP, I would go to the Montgomery County government site and check all the permits for the house you're interested in. Less than four months of ownership is a really short time to have done everything in the most kosher manner.

Seriously? I live in a DC neighborhood where houses are being flipped ALL THE TIME. They have people in and out of the house working EVERY SINGLE DAY. 120 days working all day every day with multiple crews on a 1200sf townhome with a finished basement is plenty of time to get the job done. (I know, because I have family and friends who do this kind of work for a living, and I trust what they have to say about more than some white collar office dweller like all of us.) These are row houses, so the only major structural change you can make outside of opening some rooms up is adding an addition on the back. The windows are always packed with permits.

Face it. Those of you railing against "cheap flips" are rich snobs who think the only acceptable home is one that includes top of the line everything. Maybe you haven't been paying attention to the world recently, but most people can't afford that shit. Fucking snobs.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:it depends because the flip might have forced the house to be brought up to code which was as win for us (all new electrical wiring,electrical panel, plumbings, sewer pipe to the street, insulation etc...)

It might have if everything was permitted. OP, I would go to the Montgomery County government site and check all the permits for the house you're interested in. Less than four months of ownership is a really short time to have done everything in the most kosher manner.

Seriously? I live in a DC neighborhood where houses are being flipped ALL THE TIME. They have people in and out of the house working EVERY SINGLE DAY. 120 days working all day every day with multiple crews on a 1200sf townhome with a finished basement is plenty of time to get the job done. (I know, because I have family and friends who do this kind of work for a living, and I trust what they have to say about more than some white collar office dweller like all of us.) These are row houses, so the only major structural change you can make outside of opening some rooms up is adding an addition on the back. The windows are always packed with permits.

Face it. Those of you railing against "cheap flips" are rich snobs who think the only acceptable home is one that includes top of the line everything. Maybe you haven't been paying attention to the world recently, but most people can't afford that shit. Fucking snobs.

I'm not the PP you were responding to, but I made some posts about looking at flips and seeing problems.

I am not at all rich and certainly not a snob. My concern with flipped properties wasn't at all that the stuff wasn't top of the line. My concern was that there were issues that would end up costing me a lot of money to fix (electrical, plumbing) and my impression was that they did a lot of cosmetic upgrades without ever addressing other problems (again, structural, electrical, plumbing).

I certainly would have loved to buy a fully renovated house with new appliances, even if not top of the line, but every flip we looked at was marked up quite a bit and had some big red flags (I'm the PP who mentioned all of the ungrounded outlets and old electric panel that never would work for all of the new appliances). My concern was that I would be buying something that would either be a lot of money to repair or actually be hazardous.

When we looked at flips, my partner would peek into the attic. On a couple of properties, he noticed that there were code violations -- exposed wiring in contact with attic insulation (huge fire hazard) or renovated bathrooms not vented properly through the roof, which would lead to mold.

If you found a flip that was done well and your inspector didn't find any red flags, then that's great. But I think it's good for buyers to be informed of the potential problems with flips. I would still recommend they look at them, especially if there is little else in the market that meets their needs, but just be thorough, require an inspection and don't be shy about asking for things to be done to code if they weren't already.

[Anonymous]

4/25 11:02 back again. I'm an agent, and lo and behold, had a buyer who wanted to make an offer on a flip in Silver Spring today. Not only was nothing permitted, they were actually cited for doing work without a permit. And the kicker - the LLC listing the house doesn't even own it yet. They have been doing work for more than a month on, and signed a listing agreement to sell a house which they do not yet own. They need 45 days to close so my buyers would have to wait that long. And probably much longer to get clear title if there was a missed initial on the foreclosure proceedings that occurred before the flipping LLC got interested.

Do your homework, people.

[Anonymous]

Researching flips and finding some good threads. Good inspector and permits. Got it. Home warranty. OK. Anyone think of any other red flags to look at to see if this was done well or cheaply? I'm in an area where there are not many of these at all.

We are finding the home owner improvements in this area have been horribly cheap. This could be a good thing if it was done right.

Original house was a short sale but that is all I know so far.

[Anonymous]

Remember that the point of selling a flip is to profit, so where money can be saved, it will be.

OTOH, some flips are better than others. A good sign is if permits were pulled, then you know that it was inspected at some point. High end finishes don't tell you much, only that it looks expensive on the outside. It's easy to switch out a Kohler with a Dornbract, but replacing PVC with copper behind drywall is a much more expensive undertaking. Even a good inspector can't open up drywall.