One flip gone wrong!

I had a flip that was set to close last month and then we got the inspection report back. Needed a roof, furnace and it was on a septic! I had my doubts about the roof and furnace, but I was using a new contractor and I figured he would let me know if they were bad. The home was listed as being on sewer every time it had been in MLS.

The buyers did a sewer scope and found the line went into a septic, and the septic was ten connect to the city main sewer line! After a roof, furnace and a new sewer line I probably won't make any money on this one. On a happier note I am making a boatload on another one.
Creator of Invest Four More
If you want more help with your investing, check out http://investfourmore.com/blueprint-for-successful-real-estate-investing/


Comments

  • In a situation like this would you aim to rent it out and hold it instead of flipping?
    Michael Lane Jr.

    Sacramento's Real Estate Specialist 

    MichaelLaneJr.com
  • No, I have too much money tied up in it. I would rather cut my losses and use that money for a better investment.  
    Creator of Invest Four More
    If you want more help with your investing, check out http://investfourmore.com/blueprint-for-successful-real-estate-investing/


  • Is there any possibility that something like this would be covered under Title Insurance?
  • No, title insurance only covers title problems, liens or judgments. THey don't verify condition or features 
    Creator of Invest Four More
    If you want more help with your investing, check out http://investfourmore.com/blueprint-for-successful-real-estate-investing/


  • I hope you have found a new contractor!  Those are inexcusable mistakes.  
    I rarely do not get inspections on properties I intend to flip, unless they are newer, and my walk through looks really good. Prior to making an offer, I always do my own complete checklist of all major systems, and pay for a sewer scope or septic inspection. I check the roof, foundation, plumbing and electrical, and the age of the furnace. If there is any doubt about any system, I pay for a specialist for his/her opinion (ie., roofer, electrician, HVAC guy, etc.  I have flipped many properties, so I know what issues can come up, but I also know my own limitations, and margin for error.
    Since Mark is a pro, I would assume he got the property at a good enough discount to get out OK, but to be safe, you should always hire qualified inspectors, and find out any problems before closing.
    Carl Borrmann, MBA, Realtor
    Specializing in Boulder County and North Denver
    Brokers Guild Residential
    (303) 282.8282
    www.ColoradoCarl.com

    image
  • Good advice Carl! I rarely do a sewer scope, but I really should. The crazy part about this one was the last five MLS listings had sewer and no probabaly every did a scope and checked. 
    Creator of Invest Four More
    If you want more help with your investing, check out http://investfourmore.com/blueprint-for-successful-real-estate-investing/


  • On older homes, raised foundation esp. It can be very important to scope. I got fed up waiting for plumbers to come and I purchased my own scopes and sound to locate camera. Also I found some carry cameras, others don't. I guess I am impatient since time is money.
  • Haha, nice Doc. I rarely do any inspections anymore and once in a while it bites me, but overall I think it is worth the time saved and it helps me get more deals.  
    Creator of Invest Four More
    If you want more help with your investing, check out http://investfourmore.com/blueprint-for-successful-real-estate-investing/


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