5 Westmont Street, Middletown (Do flippers know how to inspect a property)

[James McGovern]

Over the weekend, I went to inspect a property coming up for auction. I ran across several flippers who caused me to question a few things. They did not detect several major things wrong with this property including but not limited to:

1) a Leaking roof

2) No public water or sewer

3) The septic system is not working. The well is also dry

4) Prior upstairs renovations wll need to be town down and redone from scratch

One of the investors had brought along an inspector who also did not catch this. I continue to scratch my head wondering how many flippers never learned how to properly inspect an investment property?

[Andy Sabisch]

You are not seeing an anomaly as we have seen the same thing in our areas.  I think that a lot of wanna-be investors watch some YouTube videos, buy a book and jump in with both feet.  Then they find out that things cost more than expected, they missed items that seasoned investors would not have and things take longer than planned.  We know what could cost us and have professionals that come in and look at that specific area.  The general home inspectors are in 99% of the cases a waste of money as they use template software and often miss the items that are the unexpected costs.  I always love the caveat in the reports that says "Recommend you get an assessment by a professional" . . . hence the reason we have a plumber, a roofer, an HVAC guy and a foundation person we call on projects.

Recently we picked up a duplex that had been under contract and fell through over $2,000 between the buyer and seller.  The seller provided us with the home inspection report and it was 60 pages of fluff.  Torn screen, dripping faucet, burned out light bulbs in the basement . . . . but the inspector had missed the fact that the new furnace was only heating the first floor - the second floor with three bedrooms and a bath had no heat!  He also missed the obvious runs of knob and tube wiring that were hanging loose in the basement.  BY pointing these items out to the seller (an estate sale), we got the property for a discount and knew what we were getting into.

On the flip side much like you, we have gone to look at houses where other buyers (investors) were also present and they missed some key issues or under-estimated the cost to correct.  In two cases the property was listed a few months later for less than what they had paid for it after a demo had gone off the rails.  

Unfortunately advertising get rich quick training is inexpensive and you do not need many takers to make good money . . . I hate to see people that really did not have the money for the course get further behind after finding out that the information they paid for was of limited value.