FLIPPING HOUSES – BUYER BEWARE

So, you have been watching those shows on TV that feature all those now wealthy people who flip houses. It’s a great idea if we had the time we would do it ourselves. However we have some advantages, an understanding of construction, building codes & practices, and what to watch out for when buying a property with all that potential. Without some of the above knowledge and experience you can really get in over your head and it could cost you a lot of money. We get calls all the time from people that bought an older house to flip and are now faced with huge costs for asbestos abatements, foundation issues or construction not done to code and now all the potential profits are eaten up by these unexpected discoveries.

Here are some things to watch out for;

  • Asbestos  — if built before the 1990’s it could contain  asbestos
    • on the roof (felt)
    • in the attic insulation
    • in the ceiling texture (popcorn)
    • in the drywall joint compound,  or plaster finish
    • in the flooring
    • in the insulation on your ducting on the furnace
    • siding and wall paneling
    • exterior stucco
  • Lead Pipes — if the house was built before 1975
  • Lead paint, could be on any type of building material that’s painted.   Your home probably contains lead-based paint if it was built before 1960. If built between 1960 and 1990, the exterior may contain lead-based paint.
  • Old /inefficient  furnaces
  • Old and dangerous wiring — not to code and will have to update the entire house and all electrical panels.
  • Crumbling and /or leaking foundations
  • Mould and / or water damage

In addition there are many hidden problems that the home inspector and/or you may not see evidence of;

  • Water damage
  • Poor insulation
  • Construction not done to code ( i.e. windows installation, roofing,  vapour barriers, heating and ventilation systems)
  • Not to code and possibly dangerous renovations completed by previous owners
  • Crumbling and /or leaking foundations
  • Asbestos (the majority of home inspectors do not test for asbestos as part of their inspection.)

Do not rely on the current owner or the real estate agent to be aware of these issues, although definitely ask them, they are legally obligated to tell you if they know!

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