Houses Not to Buy –Part 2
After we posted our lists of “Houses Not to Buy”, we had several of our readers send in their own ideas of houses not to buy when flipping. We thought we would put together another list that experienced flippers also warned to stay away from. What better way to save time and money than to learn from someone else’s mistakes!
Backs up to apartment buildings-For one, being located next to an apartment building complex will bring your property value down. The point of rehabbing is to bring up the value of the property. Not to mention the possibility of noise, traffic and the caliber of renters the complex caters to (college students, low income, or young business professionals).
Secluded or too rural-It takes a certain buyer to want to live in an extremely rural or secluded area. Don’t pick a house that its nearest neighbor is a mile away. Most people like convenience and flippers will have an easier time selling a house that is near grocery stores, interstates etc. Plus you also want it to be easily accessible to you and your team of contractors.
Bad school district–If you have ever looked at an MLS listing then you know that there is a space for school district. Reason for this? People that have kids want their kids in a good school plain and simple. We can’t tell you how many families we have seen over the years pass on a house due to the bad reputation for the school. Do your homework and ask around, ask the neighbors or look up the school ratings. It could save you a potentially botched deal on a flip.
Near Train Tracks-This is something you may not realize upon your first visit to the property but is worth checking with your realtor to see how often the tracks are used. They can definitely affect the value of the property. Loud train whistle at 2 a.m. Enough said.
Mixed use or commercial use- First problem is many people don’t realize that they will need a commercial loan to buy a mixed use property even if the majority of the income produced from it is the residential section of the property. Also you would need to keep a close watch on the strength of your commercial tenants if you choose to rent to any. http://www.biggerpockets.com/renewsblog/2008/10/02/investing-in-mixed-use-commercial-property/
Bad lot- It is not to say that you should NEVER buy a house with a bad lot, but it will definitely make it harder to sell. Our team recently sold a property with a severely sloping back yard. We had to cut into the hill, add a retaining wall, and level the area at the end of the driveway to make it more usable. Problem solved in this situation but you will want to assess the cost vs. the return on an issue like this.
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