A “Fix & Flip” Inspection Is Important

General Real Estate, Market Update

Paul Furman AJF b&w

Paul Furman
President and Owner, AJF Engineering & Inspections

 

Many “fix & flip” investors take pride in remodels by using quality materials, licensed contractors and upgrades to old, antiquated systems; other investors put “lipstick on a pig.” These investors use unlicensed contractors and cut corners to maximize profits. Unfortunately, the cutting corners method has become more common in recent years due to a lower profit potential in the fix & flip market.

A professional home inspection is a necessity for a “flipped” home. Following are some common red flags based on thousands of home inspections in the Valley:

  • Even when an entire home has been remodeled, never assume the work was done correctly until it is inspected – and the remodeled components tested (i.e., faucets, drains, kitchen appliances, etc.) A new, built-in microwave without an electrical outlet to power the microwave, a new laundry room without a dryer duct installed and a dishwasher drain line knockout that was not removed at the disposal resulting in the dishwasher to not drain are examples of unnoticed items.
  • Homes built prior to the mid-1970’s do not have electrical systems that meet modern standards. This can be problematic when a remodel creates additional electrical loads. Some problems can include:
    • Tripped circuit breakers due to higher electrical loads when a microwave, dishwasher and disposal are added to a kitchen remodel. Installation of additional electrical circuits is required – often times extra circuits are not added
    • Homes that utilize 2-conductor, ungrounded electrical wiring. Remodelers often replace the 2-hole outlets with 3-hole outlets, but fail to upgrade the electrical wiring resulting in ungrounded outlets. This is a potential safety hazard.
    • An electrical panel that hasn’t been upgraded can increase electrical loads making it too great for the existing panel, creating a potential hazard.
    • Improper electrical wiring in the attic is a common defect and a hazard.
  • An “open” floor plan is an attractive feature of a remodel; however, making improper and unpermitted structural modifications to the roof or attic structure can occur. Any structural changes requires a city permit, engineering analysis and city inspections. Because permit review is not included in the home inspection scope of work, buyers should contact the City to ensure the appropriate permits were used.
  • A/C and heating systems are often neglected.
  • A fresh coat of paint will cover up previous or active leaks. Buyers should consult with the Seller Property Disclosure Sheet (SPDS) for any disclosures related to moisture penetration.

A “fix & flip” home is a great option. However, it is important to make sure there are no major red flags before a purchase. A professional home inspection can go a long way to achieve peace of mind.

 

Paul Furman has been in engineering and construction for over 30 years. He established AJF Engineering & Inspections in 1996. Under Paul’s leadership, the company has conducted over 50,000 residential and commercial inspections in the Phoenix metro area. Paul can be contacted at paul@ajfengineering.com or 480-661-8888.

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