Some bargain properties are auctioned off for pennies on the dollar, but there is always the possibility that there could be hidden costs. This is why it is imperative that you perform your due diligence when researching investment properties. Below are just three ways that house flipping projects can quickly burn through your budget if you aren’t careful.
- Liens From Unpaid Taxes and Renovations
Some distressed properties will have one or more liens against them that must be paid before you can turn around and sell them. Depending on the situation, the buyer might be held liable for these costs.
Liens could be in place due to unpaid taxes, unpaid maintenance fees from the homeowners’ association (HOA), and unpaid repairs performed by contractors from previous renovation projects.
- Massive Cleanup Left by Hoarders
Some investment properties were previously occupied by tenants or homeowners who suffered from hoarding behaviors. Take advantage of every opportunity you get to visually inspect the property inside and out. And if you’re unable to view the interior prior to making a bid or purchase, be ready for the possible need to hire a to clean out the property quickly and safely.
- Damaged Plumbing and Electrical Systems
Many house flippers buy distressed properties only to find out later on that the damage was much more extensive than what they initially expected. Sometimes tenants and previous homeowners will rip the wiring right out of the walls to sell off to recycling centers. It’s also not uncommon for disgruntled tenants to intentionally plug up toilets and pipes simply out of spite when they get evicted.
Rewiring an entire house can run tens of thousands of dollars, and replacing the pipes inside the walls can be similarly expensive – not to mention the damage to walls, floors, and ceilings themselves. But again, it all depends on the previous residents. Some take good care of the property while others go out of their way to cause damage.
If you are in need of a home clean-out service in Los Angeles, contact Clutter & Hoarding Pros at (562) 972-3180 to discuss your investment property cleanup and get an estimate.
Be the first to like.