Ask Jo: Is A Flipped House A Good Buy?

Q: I'm looking to buy in Northeast LA, and it seems like every house I look it is a flip job. Are flipped houses good investments? What should I be aware of?
--Nathan, Highland Park

A: Nathan, good eye on you! You're right--flipped house are big business here in Northeast LA, where we have some of the oldest residences in the entire city. Flipped houses can be great investments; there are many amazing contractors and interior designers doing truly inspired renovation work to homes in the area that desperately need a little love. But that isn't the case all the time. Here are some guidelines to follow BEFORE you sign the paperwork on the flipped home of your dreams:

Always do your research:

You probably wouldn't go to a dentist without looking into reviews; the same goes for contractors and investors. Call an agent to help you find out who did the work on the house in question (you could also find this in public records). If it's a large investment firm, that means they probably had the budget to make quality renovations. If it's a small firm or a brand new investor, they may have a smaller budget, which may translate into cheaper work or cutting corners. 

Get inspections:

OK, so this one goes for all houses, but ESPECIALLY when you're buying a flipped house, make sure to get inspections. Ask to look at permits so you know everything's up to code. If an inspector finds that something isn't up to par, you can legally rescind your offer.

Don't be seduced by awesome staging:

Investors hire professional stagers who know how to make houses look beautiful and appealing to buyers. Make sure you're buying a house for its STRUCTURE, not its interior design and decor. 

For more tips about buying flipped houses, check out my video on the topic: http://www.youtube.com/watch?v=iidoBnDsmEI&feature=youtu.be

Good luck, Nathan! I hope you find the house of your dreams!

Got a real estate/neighborhood question? Email me at askjo@theokeygroup.com. See you next week!