Look for these things before buying that fix-and-flip house

By | March 11, 2019

In a discussion about fix & flip houses, a redditor gave us this great list of things to look for & consider  before buying.

 

Site – – Does the ground around the house slope consistently away?

– If there are underground drains, where are they going?

– Are there any trees at the foundation?

– Is there adequate drainage for retaining walls? Any cracking? Horizontal cracks are the red flag.

– What shape is the fence in? Do the gates work right?

– Driveway/walkway condition, is there a lot of cracking? Is the surface broken up to expose aggregate?  Use less ice melt and put a coat of sealer on there to keep it from getting worse.

– Any soil contact with posts on wood-frame elements like a deck or patio? Is there a big ledger board (2×8+”) where it abuts the house? Does that ledger board have a metal flashing on it?

Exterior – – What kinds of siding are in use? There’s a few that are bigger concerns than others. EIFS (exterior insulated finish system) looks like stucco, but instead of having control joints like stucco (to mitigate cracking elsewhere), it’s just one big section; the concern here is that there isn’t much protecting the house framing from getting wet when that siding does crack.  It’s a big issue.  AMV, adhered masonry veneer, looks kinda like stacked stone siding, take a closer look and see the mortar was only up  against the house and the material pushed into it, like tile.  It’s almost never installed right, there’s supposed to be more clearance at the ground, the water protection around doors and windows always gets neglected so there’s almost never a house I look at that’s either a) got moisture damage around the top of some windows or b) got interior repairs.  The interior repairs will only work through maybe the next couple rainstorms, so…good luck with that.  The third material of concern is composition board siding, it can either be planks or panels, but it’s pretty much just particle board.  When it gets wet, it swells up and looks all gross and infected.  REALLY common in the 90’s.  Not really a material defect in itself, but a lot of people just don’t put in the extra maintenance like they should, this stuff ALWAYS needs a good coat of paint, caulking at the nail holes and butt joints, and those things just get put off or ignored because people don’t know better.

  • Brick siding is pretty common where I am, so I’ll bring up a few things to look at. Any trees or shrubs growing up against the brick? It’s a very porous material, so if water penetrates in there and freezes, it’ll damage the surface of the bricks. You can mitigate that with a masonry sealant, but if bricks have spalled deeper than the mortar then they need to be replaced. Are there any cracks? They often start around doors and windows, but there’s a few different types to be aware of. Cracking ABOVE windows/doors are lintel cracks and just mean the bricks weren’t adequately supported during construction. Often not a real big concern except over a real big span like a two-car garage door. A little cracking there is passable, but if they’re 1/8”+ wide on both upper corners, it may indicate a significant lack of support and the only real fix for that is to take all the affected bricks down and starting over ($$$$$). Cracking BELOW windows means there’s been foundation movement. I’m in Oklahoma, where evangelical oil barons have sucked the juice out of the land and turned the area from a grape into a raisin. We’ve got earthquakes, clay soil, all kinds of good reasons for motion. You can call a local realtor or structural engineer to see what the threshold is between a yellow flag and a red flag. I see cracks on pretty much everything but new construction, I always point them out but 90% of the time it’s just a matter of sealing the cracks and monitoring them. If you’ve got your drainage figured out then cracks shouldn’t get worse, but if they’re 1/8”+, it may be worth investigating further. Also of note, cracks that go straight THROUGH brick are often done by a one-time stress event like earthquakes rather than the much slower process of foundation settling.

– What kind of windows do you have? Double pane are way more energy efficient, but they have an expiration: is there a fog or condensation between the glass?  The thermal seal is broken.  It’s cosmetic, but it’ll only get uglier.  The biggest concern here is with older houses though, because if the windows are original then they’re way less likely to open.  Then the problem becomes the two means of egress in bedrooms, there HAS to be another way besides the door for people to escape their rooms in case of a disaster, and windows are just about always that other option.  If the windows are sealed shut, then we’ve got a problem.

– What kind of shape is the trim in around the house?  We’re looking primarily for wood rot, but also if the paint coat is in good shape, any other evidence of moisture or pests.  You’ll see most of your issues around windows and the garage doors.

Roofing – I don’t know how many buyers actually get up on the roofs for themselves, but I’m gonna throw this one out there anyway.  I’m just going with fiberglass shingles because that’s what’s most common in the US. – First thing I do is take a little corner of a shingle and twist it to see how brittle it is.  The more bend it’s got to it, the newer the roof.  A hard thing to gauge in freezing weather, but knowledge is power.

– Are there damaged or missing shingles?  Those are obviously the first concern.  But then look for ‘zippering’, a little more space between the shingles that runs in a stairstep pattern, and see if you can get your fingers underneath a few shingles.  If you can and only one or two vertical rows come up, that’s not great but it’s not the end of the world.  A little tube of sealant or adhesive can fix that.  But if you can easily lift up 4 or 5 courses of shingles? That’s wind damage, son.

– Also look at the quality of the shingles as you’re walking around.  Are there adequate granules? Is there curling or cracking?  The most common manufacturer defect with shingles is inadequate adhesion between the mesh and the granules.  The important distinction to make here is the LOCATION of the granule loss on any given shingle.  You wear a roof out the more you walk on it, so granules fall out that way, but it’s more often in the middle or at the bottom of any given shingle.  The defect is when there’s a noticeable amount of granule loss at the top of a course of shingles, and you’ll be able to see the same exact thing on several other adjacent sections too, since it’s usually an entire bundle that’s faulty.

– Also look around for exposed nail heads or staples.

  • How does the guttering look? Do all the troughs slope toward downspouts? Any fascia discoloration or rot behind the runs? Do the downspouts extend away from the foundation? Are they properly secured to the house? Are the elbows at the bottom crushed at all?
  • Chimneys are a pretty common concern too. The siding around them, whether it’s wood or masonry, often gets neglected because people don’t think to look up there that often. If it’s wider than 3’, it should have a cricket (little ridge) behind to help with water diversion. Is there a rain cap? Any signs of rust anywhere? –
  • Furnace and water heater vents – Supposed to be at least 2’ up through the roof, and the only vent within 3’. That doesn’t always happen, so you’ve just gotta assess potential problems on the fly. I had a house this morning where both vents had good height, but were maybe about 18” from each other. One rose a little higher than the other, and both were well over the ridge of the roof, so there wasn’t really any realistic drafting concerns. Why sound the alarm on something like that? Other stuff to look at for these metal vents is if it’s got a cap and if the storm collar is sealed to the pipe.”, both of these help prevent water from running down the pipe and into the attic.
  • Plumbing vents and other flashings – These often have the rubber boot that just grabs around the pipe, and they dry out with age and sun exposure. Are there any tears or other integrity concerns? If it’s starting to crack like dried rubber does, it’ll need to be replaced sooner rather than later, but not an immediate problem. The other common issue with these is when they’re inverted, like a donut. Rather than the rubber boot sloping downwards like an anthill, it’s sunken down and can hold water.

Garage – Lets be honest…there’s not a whole lot to look at here in itself. Usually there’s the electrical panel and gas appliances, but just the garage element itself? Boring. If there’s big cracks in the slab or drywall, there’s a problem. The biggest thing to look for here is the separation between the garage and the house. Is is a solid core or steel door? Is there a pet door? Construction standards call for a 1-hour firebreak, if you want a pet door then just understand the risk: carbon monoxide leaking into the house.

Attic – another one most buyers don’t get into themselves, but we’ll throw stuff out there anyway – Obviously we look for moisture damage, but there’s a big difference between damage and staining. Always focus on roof penetrations like vents and chimneys, and expect to see some staining around the chimney. But is the staining only on the framing and not the decking (what the shingles are on)? That likely means it’s an old leak and a new roof has fixed it. Poorly installed flashings are the most common culprit, and a good roofer will address those during a total replacement.

  • Attic ventilation is really important too, and there’s numbers and equations to figure out how much you need, but I’m not a numbers guy. <1500 sqft, you oughta be fine with gable vents (often the screened openings at the left and right sides of the home if you’re facing it from the street), 1500+ sqft should have some combination of soffit, gable, pot, and ridge ventilation, but too much ventilation can actually become self defeating. Every house is so much different, so it’s hard to really give much of a blanket statement for what’s adequate. But if you’ve got soffit vents, you should see baffles in the attic that keep insulation from covering over it and preventing proper airflow.

Insulation – Another real subjective one dependent on climate, but there should at least be consistent depth. Flippers will replace light fixtures and not bother spreading around the insulation they moved out of the way. On much older homes, the little round balls of insulation that look kinda like rabbit turds are asbestos. Don’t screw with that stuff, let a pro deal with it.

  • What sort of framing is there, trusses (with the metal gusset plates) or conventional? There are some HVAC guys that don’t care about anything but their own work, so they’ll cut into the framing to accommodate ductwork, but then the problem becomes dead load distribution. Trusses are specifically engineered, so cutting them up is widely considered a total dick move. You’ve got a little more forgiveness in conventional framing but, again, you’ve gotta know what to look for as far as reinforcements. If you see framing members that look like they’ve been cut or modified, have a pro dive further into it.

Kitchen – This part of the house has its hand in a few different pots, so we’ll go over that stuff in electrical and plumbing. It’s just stupid things like “does the faucet work like it should?”

Interior – Again…pretty straightforward. Damage to drywall anywhere? Damaged/broken flooring? In wood and laminate floors, a lot of flippers don’t realize they need to let the flooring adjust to the humidity of the home, so they’ll let it sit in a cold, dry garage (where it shrinks) until they install it in a warmer, more humid home (where it expands). There oughta be at least a couple days of the flooring just being right in the way inside the house, so it’ll get to the size it’ll stay. When it’s not given a chance to acclimate, the flooring will very commonly “bridge”, meaning all these planks are expanding, but they’re not given anywhere to go so they push up against each other and lift up on the subfloor. Not really a material defect so much as ignorant workmanship.

Bathrooms – A lot of this will just be in plumbing. – Do the heat/light/vent fixtures work? In colder climates, the bathroom vents need to make it all the way outside because humidity buildup in the attic will lead to moisture issues. Down south of the Mason-Dixon, it’s not as big a deal because we’re punished with extreme humidity anyway.

  • Are the showerheads, faucets, and valve handles all tight? A little bit of jiggle is passable, but we don’t wanna put a bunch of needless mechanical stress on the plumbing lines, especially if they’re copper.
  • Little chips and glazing cracks in the bathtub can lead to premature rust, so even if they’re small, just get a repair kit from Lowe’s or HD and stay on top of the concern before it becomes a real problem.
  • What kind of shape is the grout/caulk in around the tub? It’s good practice to use caulk in the corners and grout in the walls, but sometimes people just put grout everywhere and hope for the best. Stuff just deteriorates over time, so look for cracks anywhere that may let moisture through and into the walls.

Electrical – This is a money one. I almost always find electrical issues in a house. – Where’s the panel? It’s gotta have good clearance around it. There’s measurements, but just…don’t be dumb about it. Can somebody easily get to the panel to make repairs? Then good. It can’t be in a bathroom, no ifs, ands, or buts.

  • Zinsco and Federal Pacific brand panels are red flags. You’ll find them in homes anywhere from the 50’s to through the 70’s, and then they got rebranded as Sylvania into the 80’s. Best practice would be to entirely replace these abominations, but that’s the buyer’s prerogative. I’m writing enough already, and there’s plenty of articles out there about why those brands are heinous.
  • Are there any double-taps in the panel (two conductors at one lug/breaker)? It’s supposed to just be one wire , and flippers are great at making their own rules until someone comes along that actually knows what’s supposed to be done, so that’s a common issue with them.
  • On <1970 homes (generally), if the wiring hasn’t been redone, then there should either be a lot of GFCI outlets, quite a few GFCI breakers, or the original two-prong outlets. People replace the outlets without actually updating the wiring, so you could really screw up electronics if you think you’ve got a grounded receptacle but really it’s just had a facelift for convenience. Not really a red flag so much as something to be aware of.
  • Single strand aluminum wiring was common from the mid-60s to the mid-70s, and then everybody realized it was burning down people’s homes. Stranded aluminum is okay, single strand is not. I’d never buy a house with aluminum wiring unless I was looking forward to sinking $10k into rewiring.
  • Modern standards require GFCI protection at the exterior, garage, kitchen, and bathrooms. The implementation of the standards was progressive through the 70’s and 80’s, and it could be any combination of outlets and breakers, so you can’t just hold people to the fire on a 1978 house with original outlets. The important thing is that those areas have the necessary protection. Do the outlets/breakers trip and properly reset when you test them? If the outlets have been replaced and are STILL lacking protection, then that’s a problem. But certain concerns should be grandfathered in because standards change over time, you know? Doesn’t mean I don’t point it out, but I can’t say it’s a red flag now when it wasn’t a red flag during its construction and hasn’t been touched since. Except stuff like aluminum wiring and those godless panels I mentioned.
  • All splices are supposed to be in an enclosed junction box. We can’t know what’s behind the wall unless we tear it open, but if you’re seeing a bunch of wires coming together outside of boxes, that’s not how it should be.
  • On older homes, be aware that there’s not gonna be as many outlets as newer homes. People in the 20s didn’t have the electrical demands that we do now. So it may be the most beautiful house you’ve ever seen, but wouldn’t you be pissed if you move in and then realize there’s only one outlet per bedroom?

Plumbing – Another money one!!! You’re not idiots, you know what a leak looks like. – So we don’t want lead supply pipes. Lead drains are okay, since you’re not drinking out of them. I’ve yet to see any lead supplies, but I’m sure they’re a thing somewhere.

  • Galvanized supply lines gradually get filled with sediment and mineral buildup, constricting their flow. Common service life for them is 50-70 years, and they were done away with around 60s-70s in my area. Not a red flag, but something to be aware of because it’ll need remediation eventually.
  • Are the drains properly sloped? I had a house just yesterday where the kitchen sink line past the P-trap went upwards into a drain line. Seriously…who’s okay with that? Most don’t even think to look.
  • Look in the cabinets below sinks for any swelling or deterioration, that means there’s been a leak in the past. It may have been as simple as not wiping the water away soon enough after replacing a sink or faucet, but it’s worth asking the seller about.
  • Are fixtures draining well enough? Any indications of low water flow anywhere? Stoppers are functioning like they should? Hot is on the right and cold is on the left?
  • Sometimes I come across something called an S-trap, and it’s bad. So a P-trap is a water seal in the drain to prevent sewer gas from seeping up through the pipes and into the home. S-traps (where it looks like one regular P and then an upside-down P immediately past it) have a propensity to siphon too much water out as it’s draining, removing that intended water seal.
  • Are there any flexible drain lines below the sinks, where they’re ribbed for the homeowner’s pleasure? Those things are a curse, used by people either too lazy or too ignorant to be allowed to work on their people’s homes. The ribs in those drains can catch gunk and clog that much easier. Just use PVC and make everyone’s life better.
  • Vampire taps are often used below the kitchen sink to run water to the fridge. With these things, it’s not a matter if if they fail, it’s a matter of time until they do. All these things do is puncture a supply line and then fend off leaks with a gasket and a prayer until the gasket fails. Use a tee fitting like a civilized person.
  • Are exterior faucets loose? It’s easy enough to fix that, but we don’t wanna put unnecessary stress on plumbing lines, especially in a twisting motion. That’s not great for softer materials like copper.
  • No screened dryer vents unless you want a bonfire roughly the size of your house. We want dryer vent hoods to have a damper and act more like a one-way valve that only opens with airflow. Putting a screen over the vent, very common, is bad news. We don’t want to start trapping lint and then have it back up the whole length of the vent pipe and it’s all of a sudden at the burners or heating element, because then you’ve got some of the best kind of kindling you could find… Also, if you’ve got a vertical run on the vent, best practice is to just clean it out every year or so. Dryers are made to blow lint through about 25’ of pipe, even less when there are bends. Yeah, it’s annoying to have to do, but welcome to home ownership! Hurray!

HVAC – There’s so many different kinds and so many age-specific concerns that I’d lose my mind trying to explain them all. So we’ll aim small here. – Are the coils at the outdoor AC unit clean? It’s common to have the vent terminate nearby, so it can get dirty fast. Just have it serviced every spring, that’s the best practice.

  • Where I am, we give the condensing units 10-18 years and furnaces 15-20 of expected service life. Some go above, some go below. Just be aware of it and try to plan accordingly. AC units have a data plate on them where you can find the manufacturing date, it’s either printed very obviously, or commonly the first or second pairs of numbers in the serial. You can check out buildingcenter.com if you aren’t sure, or appliance411.
  • I don’t know many buyers that take the cover off the furnace, but here we are. The main thing you’re looking for is a consistent blue color in the burners. Turn it on and let it run for a few minutes, you should hear the distribution fan kick in after about 30 seconds and that’s when you wanna be really paying attention, because that’s when the rubber meets the road in this whole operation. When air starts moving past the heat exchanger is often when you’d see the flames change colors. But we don’t want them to change colors, we like the blue flames.
  • Move your hand around near the area of the flames. Not stupid close, we’re responsible adults and not brain dead primitives, but you don’t wanna feel much residual heat at all, as it should be getting absorbed by the heat exchanger inside the unit. If the area feels more than a little warm, then you may have an issue with the exchanger ($$$$). I have my furnace serviced before every winter, I’d recommend the same to anyone else, the HVAC tech would be able to diagnose any concerns.
  • Look for any rusting inside the furnace unit and around the burners, sometimes it’s a condensate leak, sometimes that rust is chunks from the heat exchanger coming apart. Either way…ask the seller if they know anything about a previous repair, and if they don’t then escalate the issue to a pro.
  • It’s just a good idea to have a float switch hooked up to the condensate drain line. It’s like a smaller scale version of what shuts off the water in a toilet tank, except this shuts off the HVAC equipment in case of a water issue. Not mandatory in all cases, but a good idea, especially if the blower/furnace equipment is indoors or in the attic.
  • Where does the condensate drain line terminate? Sometimes there’s a drain right inside the appliance closet, sometimes they run outside. If they terminate outside, we don’t want it to be dripping water right at the foundation, at least put a rock or splash block or something beneath it if you don’t want to extend the drain line farther away from the home. We don’t like water right up against the house.
  • No gas fired appliances in bedrooms because of the risk of carbon monoxide poisoning.
  • What’s the slope on the furnace vent? It should be upward, even if it’s gradual on a mainly horizontal run. The concern here is making sure the combustion byproducts make it all the way outside as easily as they can, we wanna make it as smooth as possible to get rid of them. If the vent pipe looks level or has a downward slope somewhere, just get it redone. It’s either that or you’re tired all the time and then you realize 15 years later when you get your new furnace that you’ve wasted so much of your life being tired and unmotivated because you’d been breathing carbon monoxide. Or it’s depression. Either way, find a professional to help.

Water Heater – I give gas fired ones 8-12 years because there’s a lot of hard water where I live. Electric ones last longer, the tankless modular ones could last forever. But I see mostly gas ones so that’s what we’re focusing on here. – There’s a valve at the top or on the side near the top, it’s a temperature/pressure relief (TPR) valve. There needs to be some kind of pipe hooked up to it to direct water in the unfortunate event that it opens. TPR valves are a failsafe in the event of excess temp or pressure within the tank, and if they’re dripping then you have an issue. The ONLY time they should ever open up is to prevent your enormous tank of water from becoming a missile, and if that’s the case, then there’s safety concerns and you may as well just replace the tank rather than try to milk it for a while longer. But whatever pipe is hooked up to the TPR valve, it should be rated for high temperatures, such as CPVC (the tan one, NOT white PVC), copper, or pex, to direct the water into the pan or a nearby drain.

  • If the water heater is inside the house, it needs to be in a pan. If it’s in an attic, you should first ask why, and then make sure it’s in a pan. We don’t wanna screw with water leaks, we just wanna make sure water knows where to go if it shows up uninvited.
  • is there scorching above the combustion chamber? Around 2003, manufacturers went from an open, exposed chamber to an isolated one, so it shouldn’t really be a concern with newer models, though it’s something to be aware of.
  • Is the vent hood placed directly above the vent opening of the water heater, and does the vent go all the way out to the exterior, whether through siding or through the roof? Same goes for the furnace setup, we don’t want leaks, we just wanna escort the combustion byproducts outside as smoothly and quickly as possible.

There are a million more things that could be wrong with a house, but I’m just trying to focus on some of the most common ones here, and I’m sure that even then I’ve overlooked several. But hopefully this gives you something to work with and expand on. And hopefully more folks can concede that not ALL home inspectors are crooked, selfish douchebags.

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