If you’ve spent the last few years saving and coming up with plans to flip a house, make 2020 the year you take the plunge! For anyone just getting started, here’s a handy checklist you can use to help you remember all the areas you should examine.
Look At The Area
If you’ve seen a property and are confident in its house-flipping potential, the first step is to look at its context. See how well the market in the area is doing and compare the property to other lists in the area:
- Check a multiple listing service (MLS) if you can get access to one
- Check public real estate websites
- Drive around the neighbourhood and make a note of how many houses are on the market. Too many “for sale” signs are a bad omen.
- If you’re comfortable, make personal inquiries with owners in the area.
What Should I Bring?
If you’re ready to have a peek inside, make sure you bring the right equipment to examine every part of the home. A smartphone can cover most of these, and you won’t forget it!
- Notepad or notebook and a pen
- A camera
- A flashlight
- A measuring tape
Review The Exterior
Once you’ve found a property and community that looks worthy of your time and money, contact the seller or agent and schedule a walkthrough. You can weigh the potential fixes against what you’ve anticipated, and see whether or not you need to bring in a partner:
- Make an inspection checklist
- Note every repair that may be needed
- Create a repair cost estimate
- Calculate the maximum purchase price
- Create a financial analysis report for potential partners
Most of that checklist comes after your walkthrough. Don’t overlook the finer exterior details! Remember to keep a notebook with you and take careful notes about what you see:
- Eavestroughs and downspouts
- General drainage around the foundation and landscaping
- The condition of the lawns and landscaping
- Fencing and proximity to neighbours
- Septic system (if the house has one)
- Skylight (if the house has one)
Review The Interior
The next step is to walk through the interior. These systems are more complicated and will require closer examinations. Remember to keep a log and take careful notes about what you see:
- Electrical box and fuses
- HVAC system
- Flooring condition and level
- Framing of walls
- The condition of the drywall
- Baseboards, mouldings, and trim
- Caulking around doors and windows
- The condition of and around sinks, tubs, and toilets
- Look for signs of water damage or covering of damage
Examine the basement, including:
- The insulation
- The walls and flooring
- Look for cracks, signs of water damage, and mould
Take a flashlight and look inside the attic:
- The insulation
- See if you can find any evidence of animal damage
- Check how vents connect to the outside
Ask The Right Questions
When meeting with the current owner or realtor, make sure to ask the right questions about the property.
- What are the sources of energy for the home – gas, electric, propane, etc.?
- Ask about the history of the home, even if it’s in very rough condition:
- Have there been any problems with the foundation?
- When was the HVAC system installed?
- When was the roof installed?
- If you notice anything that looks like a cover for damage, ask about it.
- Ask about the area. How is the market in the community? You might not get a straight answer, but it doesn’t hurt to feel it out. Bring up property taxes, bills, etc.
Find A Reliable Contractor
If you don’t have the time or skills to do all the work yourself, bring in a contractor. They don’t have to do all the work – just what you can’t do yourself. If any area of the home needs contractor work, follow these steps:
- Contact local contractors and get bids
- Prepare a proper Contractor Agreement
- Make sure the chosen contractor signs the agreement before doing any work
- Walk the contractor through the area before any work
Find A Partner
Sometimes the right opportunity comes up at the wrong time. You might find a great property to flip, only to figure that you don’t have the funding for the entire project. By bringing in a property investment service, you can help finance the restoration or renovation and won’t lose the investment opportunity!