How to protect yourself against a bad flip.

We all know that there are people out there that are not honest. Flippers and investors are no different. As a potential house buyer, you need to keep an eye out and protect yourself. This is a true statement whether you are looking at a house that is for sale by an investor as well as a non-investor. Here are some tips that we suggest you keep in mind when buying any house.

Get an appraisal :

An appraiser is a professional whose job is to determine the value of real estate. This is a necessity and will be required by most banks before they will give you a loan or mortgage. Make sure that you use your own appraiser, insist on it. This will make sure that you are paying a fair price for the property.

Get the house inspected :

An inspector's job is to inspect the property and discover any major defects and/or code violations. Inspectors will not catch everything, but a good one will catch the big problems that can end up costing you a lot of money. You also want to insist on using your own inspector to ensure that you get an honest inspection. Ask for and check references, you want someone that you can trust.

What you can do yourself :

An honest flipper or investor will not have anything to hide. Ask questions! Find out what work they did, what work they had others do and what permits were pulled. If there was an addition, a room conversion or plumbing and/or electrical work done, they need permits. You can have serious problems selling the house later on if work was done without permits being pulled.

Look closely at everything

If something does not look right, it probably isn't. Look at the cabinets to see if they were re-stained, painted or replaced. See if the flooring is constructed of quality materials. Look for the little details that show quality. You want a flipper that is detail orientated.

Water damage

Inspect all of the areas surrounding sinks, baths and showers. There should be no discoloration. Kind of poke around to make sure that something was not just painted over. The caulking around these areas should also be in good condition. Walk around the house to make sure that there is no water damage on the exterior. Discoloration is not your friend.

Inspect the exterior

Too many people fall in love with the interior and layout of a house and never really look at the outside. Look at the roof the best you can for loose or missing tiles. Is the paint in good condition? Look at areas around windows and doors to make sure everything is there and in good condition. A lot of water leaks start from the outside of the house.

These things are common sense to some people, but to others this might as well been written in Greek. Even if you do not know anything about what I talked about above, you can do a thorough inspection. Walk the house with your inspector and ask questions, these people love to share what they know. Look at the house twice. You will be looking at the layout and overall feel of the house instead of all of those little things that you will notice the second time.

This information is not to scare you, but to inform you. You need to protect yourself. These problems can be passed on to you by the most honest person in the world, but if they do not know about a problem, that problem is now your expensive problem.