Presenting The Lister Sisters!

I have been looking at a ton of homes all over the Twin Cities under $300,000.  I have seen it all Foreclosure, Short Sales, Estate homes, traditional seller homes, but the home I would like to talk about are the flip homes that are flops or just the Flip Flop.

Flip Flop homes are houses that have been bought at supposed bargain prices.  These “great deals” are then polished and shined to sell and sell fast.  But do they?

I can’t tell you the countless number of homes out there that fall into this category.  There seems to be quite a few people out there that have watched all those inspiring remodeling and flipping home shows on television.  In today’s market and especially in the Twin Cities, it is hard to find that truly good deal that allows for a flip home to be successful.

Why?  Because the market is very different from the hay days of real estate.   The market is much slower.  There is not a frenzy or urgency to buy (unless you are buying homes under $150,000.)  People have time to look and take their time to decide.   Because of this, they are looking closer at homes, at the craftsmanship and quality of remodeling.

Many of the flip flops I have seen are great at first glance, but when you really start to look close the work is not up to par or is not consistent.  I have seen a trend to use cheap grades of carpeting or cheap laminate hardwood flooring that look good today, but will not wear well.  Another flooring disaster; tile or natural stone floors placed in kitchen sand baths without replacing worn out or uneven subfloor.  Can you say crack?

Another flip flop favorite is painted cupboards in the kitchen with new hardware that look good on the surface, but have not been painted and primed properly.  How about the popular granite or siltstone countertops on old cupboards?  What a waste of money.

One of the biggest problems I see with flip flops are that the flippers themselves are not buying the right house to flip.  Don’t buy the inherently undesirable home and try to make it desirable.  That bargain on a busy street is still on a busy street. The two bedrooms without space to expand no matter how well the flipper remodels the home, is still a two bedroom home.  Generally people want three plus bedrooms and preferably on one level.

My final point is that many times  a flip flop occurs because the flipper buys an older home, a home they may have bought for a good price, and but they  remodel  the home without really understanding the market.  They may have done an outstanding job at remodeling and updating the home.  The home is picture perfect.  But has the flipper really added a ton of value to the home or have they just made the home more sellable at a slightly higher price.

This market is brutal.  Ask any traditional seller.  Everyone’s home needs to be picture perfect to sell or the owner will be knocked down on the price.  In this market when you have home, it expected that you have maintained your home.  Part of this maintenance is replacing flooring when it is worn or dated, updating your kitchen and bath after a certain period of time, replacing appliances and mechanicals, painting or taking down dated wall paper,  replacing old dated window treatment, fixing what needs to be fixed and repairing or replacing what needs to be repaired or replaced.  This is home maintenance and this is part of home ownership and now more than ever it matters.  Unfortunately for the inexperienced flipper they may be doing what is expected in this buyer driven market.  They are not adding a ton of value to the home, but just making it more sellable to a buyer.

Now don’t get me wrong.  Not every flip is a flop.  There are plenty of great homes out there that investors buy, remodel and sell.  They are usually in highly desirable areas and they sell fast.  They may also be homes that are truly bought for a “deal” which allows the investor to update the home to make it on par with the other homes in the neighborhood.  In these scenarios:  Hurray! For the investor who makes a profit and saves a home.  Hurray! For the buyer who gets to buy an updated home.

Tags: First time home buyer, Home Conditioning, home flipping, Home Staging, remodeling