Flipping An Investment Property? An Inspection Can Make or Break Your Deal

Be prepared for what a home inspection might reveal when selling your home

Since the start of the $ 8,000 tax credit and its extension to the end of April 201o, the flipping market has quite popular in the Philadelphia area. Some realtors and other investors that I’ve talked to over the past few weeks, have expressed that first time home buyers that are qualified for the tax credit, are finding it difficult to find desirable properties.

It’s that home price range between $ 80,000 and $ 200,000 where buyers are seeking homes that they would like to move into without doing any work to the homes at all. Homes for sale in “move-in condition” seem to be just a bit difficult to find.

Also, advice to the investor that is flipping the home, do a home inspection when your property hits the market. Home inspections can often make or break a deal. If possible sellers should have one done ahead of time so any additional repairs can be made and a home can be in its best possible condition. However, often a seller does not do a home inspection first and is caught off guard by a list of repairs presented in the due diligence portion of the contract process.

Also, make sure that your home inspector is a member of ASHI (American Society of Home Inspectors).

The most common home ailments that show up in the home inspection process are:
-Faulty electrical wiring
-Roof damage
-Plumbing issues
-Poor drainage

Yes, these problems can occur in recently rehabbed homes. If you and your contractor have done a thorough rehab, then your flip investment property should come through with flying colors. These are issues that can add up to a potential home buyer walking away if a seller is unable to step up and make the repairs or commit the money to make the repairs.

Examine these aspects of your home yourself, if you and your contractor know everything is in good condition and the work that has been done to your home has been completed by your contractor then you can rest easy, otherwise be prepared to make additional repairs in order to sell your home.

To view an article on home inspections by Realtor Magazine, click here.

Real Estate, Where are We? Investment Property - Buyer’s Market

When it comes to real estate the general sentiment appears to be that of putting 2009 in the past and looking forward to a brighter 2010. Looking at where we are and where we are headed as far as real estate goes will take us from the present into the future. Currently home values are affordable, because prices are low and interest rates are low. Both of these low levels add up to the fact that it is a great time to be a buyer when it comes to real estate.

Currently home values are affordable, because prices are low and interest rates are low. Both of these low levels add up to the fact that it is a great time to be a buyer when it comes to real estate.

Plus, the extension of the $ 8,000 tax credit for first time home buyers and the new $ 6,500 for existing home buyers has created a surge in home flipping for investors. Several flip and buy & hold investment properties exist for real estate investors.

Interest rates have been hovering at 5% or lower for the better part of the past year, a trend that cannot be expected to continue. As the market stabilizes more and the economy gets better, interest rates will rise. While home prices still may drop in many areas of the country, they will not drop much more. Areas that are less affected by foreclosures, short sales and REO properties are likely to level out faster than other areas due to the lack of distressed sales in their inventories. A rise in interest rates may bring real estate prices down to sell but the days of 20% and 30% decreases appear to be unlikely.

In a nutshell now is a great time to buy investement real estate, especially in the Philadelphia area, if you have been waiting for the right time to plunge into the market. Take advantage of low interest rates while they are here. It is a buyer’s market now, it won’t be forever.

For an interesting analysis of the real estate conditions and a forecast of 2010, by CNN Money, click here. I, along with other active investors that I know, believe the Philadelphia flip market is strong and will do well for this upcoming spring market.