Don’t Make This $6300 House Flip Mistake

Remember that water is a home’s worst enemy.  I forgot this during the course of buying one of my houses and it cost me $6300.

 

Victory Basement Picture OneWhen you are out looking at fixer upper houses you should be constantly looking for signs of water damage or situations that promote water damage.  In the basement or lower level of the house, look at the very bottom of the washer and dryer, furnace, hot water tank, and any other metal pieces that touch or come close to touching the floor.

 

See any rust? If so, there was water on the floor at one point. If all of these items are rusty on the bottom there may be a major, reoccurring problem which might be expensive to correct.  If the basement is finished, look at the bottom of any walls for signs of rotting or the drywall crumbling.

 

Victory Basement Picture 2Now I saw some signs of water in a house I purchased, but was really in the mode of running thru as many fixer uppers as I could and making as many offers as I could based on a quick inspection and a complete guess on repair costs – following the advice of well-publicized house flip gurus.

 

I noticed some evidence of water,  but the gutters were falling off the house so I attributed the problem to that….if I had taken the time to look at the wood wall studs, I would have seen the rot.  There were actually holes in the wall facing the backyard, water just poured thru them during the first good rain after I owned the house.  Getting two basement walls dug out and the drain tiles unblocked cost me $6300…..I was planning on spending less than $1000 to get the gutters replaced.

 

See dried up mud, dirt or any other type of strange looking film on the floor?  This usually means that the drains backed up into the basement.   This could be the result of a blocked sewer line that was unblocked but it can also be due to city sewer problems – meaning that the city is pushing water back at your house due to sewer line overloading at the street.  Instead of water flowing from the house to the street, its actually flowing from the street to the house!  This isn’t a minor issue and not something that the city can generally fix without making major sewer line changes….but it’s also not a deal killer.  I’ll tell you how to deal with this issue in a future post.

 

Mold and mildew on concrete foundation blocks is not normal, it means that there is moisture in the block.  The yard should slope away from the house.  If it slopes toward the house, the yard may actually be draining into the basement each time it rains.  Are the gutters clean?  There is more than just pride in ownership involved in clean gutters.  Gutters full of leaves and other debris eventually clog up downspouts which creates drainage problems and could result in water in the basement.

 

Take a flashlight and look at as much of the roof as you can (in the attic).  Any water damage there will be pretty obvious; most people just don’t bother looking.  Not a deal killer if you find some and not even anything that will be really expensive assuming that you were planning on replacing the roof anyway….but something to be aware of when you’re determining what price you want to bid on the house.

 

 

Along with roof problems, come cracks and water spots in the ceilings – on the top floor.  If you see ceiling cracks and water spots on other floors, this means a water leak from plumbing.  By the way, usually the utilities will be off in a bank owned fixer upper so it’s impossible to make sure that the water lines are all OK.  But you can look to see if the water meter has been pulled (it’s disconnected on both sides – usually you’ll find it in the basement).  If the water meter has been disconnected, that probably means that the house has been winterized and your water lines will be OK.

 

The good news about water damage…it scares many buyers away and in many cases can be relatively inexpensive and easy to correct.  Take the time to learn to recognize water damage – ask your roofer, plumber and other contractors to show you examples of it and help you understand how much each example costs to fix.  As you develop a good understanding of how to fix water damage, you’ll be in a position to take advantage of bargain priced properties that other buyers are scared of.

 

Don’t always assume the problem is minor though….bid based on worst case scenario and a complete estimate of repair costs.  Get the full version of the Rehab Offer Calculator now and you’ll be able to use it immediately to instantly develop a full, accurate list of repairs for any fixer upper house.  The Rehab Offer Calculator also automatically calculates an offer price based on repairs and the amount of profit you want to make.   Don’t make a quick ballpark estimate on fixer upper house repairs and bid based on that…..unless you are actively looking for a way to lose money.