When to Walk Away From a Potential Flip House

By Home Bay

Posted on February 12th, 2016

Flipping homes can be a lucrative business — when you find the right property. The further you get into your real estate investing career, the more you learn about what signals a great buy and what signals a money pit. This post will discuss some not-so-great property warning signs that you should watch out for.


  • Extensive Fire or Flood Damage

    Fires and floods often do more damage to a property than what is obvious to the naked eye. These disasters can cause major structural issues with the home that will be costly, challenging and time-consuming to repair. Some damage can be mostly superficial, but if the fire or water damage was major, you may want to walk away so you don’t end up in a never-ending repair cycle.

  • Significant Foundational Issues

    Prior to purchasing an investment property, you will want to have an extensive home inspection performed. If the home inspection uncovers any repairs — such as a sinking, cracking foundation or shifting ground, you might want to tread carefully. Foundations can typically be fixed, but the repairs can be more intensive than originally predicted. The costs can be significant, and it could prevent you from being able to flip the house for a profit.

  • Heavy Competition Coming to the Neighborhood:

    It may not occur to you to check out the surrounding area for new real estate developments, but it’s an important step in your research. New construction homes popping up just outside the neighborhood you are looking in may make your investment property less valuable. Why? Because new homes are move-in ready, more marketable, meaning they can decrease your investment potential.

  • Major Infrastructure Repairs

    In addition to having a traditional home inspection performed, you also might want to have other professionals inspect the infrastructure in the home and throughout the property – especially if you’re considering purchasing an older home. For example, a plumber can check the drains for potential repairs, particularly to the lines leading out to the sewers. Repairing major systems requires a lot of hands-on work, meaning they get costly very quickly. In some cases, major repairs may also require the involvement of the local municipality, which can delay the completion of your project. Keep these things in mind before you put in an offer.

When you purchase a property and you intend to flip it, you know that it’s going to require some work in order to get it ready for the market again. Learning how to identify homes that only require easy and affordable repairs (and how to avoid those with bigger issues) will allow for a quick turnaround and maximized profits.

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Posted in House Flipping