No investor is immune, every one has dealt with additional costs due to unexpected repairs in a flip home. Hours of research, project expenses and potential profit, getting contractors and
permits lined up and trying to hold onto the wallet. Rookie investors make rookie mistakes; overpaying, underestimating repairs, poor project management, overestimating finished market value and a thousand other things. But even experienced flippers get surprised from time to time.
Here's an example. The residents of this town home ignored routine maintenance for years, it needed extensive renovation. Several neighbors mentioned the residents were hoarders and the prospect of the home being completely renovated was welcomed news.
The preliminary inspection resulted in a significant “to do” list. The kitchen and both bathrooms will be completely replaced. The “decorative drop downs” in kitchen and bathrooms will be removed to allow full height ceilings and recessed lights.
Once the initial demo was completed, the first realization was obvious; pets urinating on walls and general lack of basic maintenance resulted in mold growth. The remaining drywall was removed about two feet up and an initial mold treatment completed. Follow up treatment is scheduled to ensure proper eradication. Mold was not entirely unexpected…but...
How is it possible that there was no insulation? That was missed by many walking the home, then suddenly the …. “Hey…WTH?” moment. At this point, the rest of the drywall is likely to be removed. It will end up being much cleaner and nicer but also allow for installation of batt insulation. That is a bit cheaper than spray foam….because you never know if there’s another surprise waiting in the wings. Those chapters are to be written...
Posted by Hank Miller on
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