Since I retired, I've had the normal calls to see if I wanted to do some 'side' work on their homes. I expected this, people found out I had all this 'extra' time on my hands. Mostly I say no; either the jobs too big or the price is too low. What shocked me was the amount of people who want me to look at houses they want to buy so they can 'flip' them. With the incredible growth in our city, there's money to be made buying and selling houses. Don't have a problem with them doing this, but where did they get the idea this is something easy to do! Must be all the shows on TV on those DIY channels. Trying to explain the amount of plumbing, electrical or HVAC changes needed to 'flip' a house can be very frustrating. A lot of older homes are not up to code and must be upgraded to new codes, once new owner takes pocession. ( Since I hold Plumbing and HVAC licenses, I try to help where I can ). Wait till the inspector shows up and asks for their 'Building Permit'. Seems they think you just grab a sledge hammer and start in on the walls. I hate to see young folks being misled and tying up all their money in something they know very little about. To some, I suggest buying the extra house to rent out as a long term investment instead of trying to flip it. If done right, rental property can work for you. Again, the key phrase is 'Done Right'. Of course, I'm probably wrong and all will turn out great for them flipping houses and they'll make lots of money.
Yes, @Tim Burr I was one who thought it was a simple transaction to flip until I volunteered on the board of a rehab organization. Being involved behind the scenes for such things as funding a project, locating properties, reading reports on required codes that must be met, etc. was just the tip of the iceberg. It was a lasting experience that I still carry with me today. I have watched people buy properties with hopes of flipping them, get started and then suddenly there's no more activity. I wondered what problem(s) they ran into but never had the opportunity to ask.
@Tim Burr "If done right, rental property can work for you." I had a rental property during the housing crisis. Property tax was hundreds higher than the almost identical neighboring houses. Not living in the house, no Homestead Exemption. Homeowner's Insurance doubled. Also,I had to find a different company to take out the insurance. All of the large insurance companies I contacted told me they didn't cover rental properties. Being far away made it worse. I had family that would have helped, but were dealing with serious health issues. Reading reviews of property managers, at least three or four years ago, even with well-known realtors, some of them do really low-down things. Just one of many examples: One property manager sent me a notice stating that she might need to put a lien on my property for not paying for the yard work done. I contacted the franchise owner. He said, "I'm looking at the email she sent you." One email. Another, more observant employee, sent an email telling me that the payment request was sent to the wrong email address. I went through several periods with it unoccupied. The last renter stopped paying. When I contacted her the last time she said to me, "I don't know if you need the money or want the money." Not that that's a condition of paying your rent, but I very much needed the money. I would hate to see anyone who didn't have a large savings account attempt to increase their income in this way. If you can fix anything and can do the maintenance, it's much more likely that it wouldn't turn into a huge burden, but it probably always is much more of a time drain and expense than is expected, at least in the beginning.
We watch these "flipping" shows on HGTV as well as the renovation shows. In any of these shows, it seems like the "flippers" are constantly being told of something expensive that has to be done. I remember, back in 2004, when wife and I were looking for a house to buy in Colorado. At the time, we were looking for a house on horse property, so I could continue with my rodeo/Team Roping. Looked at one house in Strasburg, CO, that my wife fell completely in love with. I mean, she was ready to buy the same day we looked at it. The house was in a very small town, with folks wearing Wrangler jeans, boots and cowboy hats. The two times we went to the house, we had our Western stuff on, stopped at a local café for breakfast, and fit in perfectly. We decided to pay for an Inspection to be done on the house, before buying it. OH BOY, are we glad we did! IOW, repair after repair after repair would have to be done. And, the house was actually too far from our jobs at the time. In fact, the day we got the call from our Realtor, explaining the outcome of the Inspection, a blizzard had hit Strasburg and closed down Interstate 70. We got very, very lucky that we had the Inspection done.
The last house I looked at was in an area that was transitioning from 'not so nice area' to mostly young, upwardly working couples. Property valves there were starting to soar, so this couple I know thought it's time to buy, fix up and make a bunch of money. The company selling knew the area was changing and the asking price, ( to my thinking ) was way too high. The property needed a lot of work to get to the selling stage. I wrote up my findings, gave it to them and now it's up to them. Hope things work out for them.
The house next door to us was empty for three years and was finally bought by a flipper. He quickly flipped it and sold it to a landlord who rented it out. The renters have had nothing but trouble with the house and are moving out this month at the end of their lease. The flipper cut every corner he could to save money.....why this all didn't show up in an inspection, I don't know. It'll be interesting to see if the landlord is going to fix all the problems or will just rent it out again as-is.