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Look up “flip” in the dictionary and you will find “turn over” or “cause to turn over” in “a sudden sharp movement” for the definition.

Experiencing a sudden sharp movement might be fun if you’re riding a roller coaster, but it’s not a term you necessarily want attached to your next home.

Yet, because 6% of all home sales were flip houses in 2016*, you may encounter one at some point in your home search. Before punching your ticket on a flip, take some time to learn how flippers work and what you can do to keep from lurching into the wrong deal.

The Flippers

There have always been investors who have bought houses to renovate and then resell them at a tidy profit. The practice is as American as cherry pit-spitting and pumpkin-chucking contests.  

After the Great Recession, however, flippers came out of the woodwork with professional investors buying properties at public auctions and trust sales en masse.

To maximize their profits, flippers work to make showy improvements in the shortest time possible.  These eye-catching touches might include sparkling granite countertops, fancy backsplashes, shining stainless steel appliances and other fancy fixtures and finishes to lure buyers.

If you happen to preview one of these flips, you may indeed be dazzled by the all the bling and be tempted to make an impromptu offer. Before it becomes a rash decision, however, take a step back and try to look for potential hazards or repair issues not so easily detected. Here’s how:

Research the property’s history

Ask your Real Estate Agent to find out if possible how long a home may have been sitting on the market. Non-use of plumbing and other systems may have caused a whole host of other problems. For instance, when water doesn’t regularly run through pipes, cockroaches see it as open path to your kitchen and beyond.

Check the public record

Permits, or lack of them, can also prove revealing. If you see a new kitchen countertop and see a permit was pulled for the project, it shows the flipper is likely playing by the rules. If you see an unpermitted “improvement,” however, it may cause you to wonder what other corners the contractor might be cutting.  Unpermitted rooms also don’t count as part of your home’s square footage.

Inspect what you can’t see

Because flippers are out to make a profit in a short period, they often will favor cosmetic changes to bedazzle prospective buyers, electing, for example, to install new light fixtures and drawer pulls instead or replacing the old plumbing or rotted subflooring.  

Therefore, besides agreeing to the customary 17-day home inspection period, you may want to carve out a few extra days in your negotiations to bring in your own team of experts for a more detailed inspection, paying special attention to such potential hazards as foundation cracks, aging sewer lines, chimneys, and other infrastructure vital to your home’s safe operation.

***

Flipping houses is an age-old way for hard-working contractors and handy, do-it-yourself-types to make good money. Done right and with integrity, flippers can help even turn around declining neighborhoods and increase overall property values.

But if you’re the buyer of a flip, make sure it’s on the up-and-up, and not concealing major problems that will blow an irreparable hole in your housing budget. When you properly vet your flip, with the proper inspections and investigations, your rockiest rides will be left for the amusement park, not your home.

*https://www.trulia.com/blog/trends/house-flipping-2017/

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HousingWire, a leading source for housing and mortgage lending, has named New American Funding President Patty Arvielo, a Woman of Influence for 2018. This is the 8th annual list, which recognizes the 50 most high-achieving women impacting the mortgage finance industry. The national publication announced Arvielo an award winner in the August issue of its magazine.

To see this year’s honorees, please visit: https://www.housingwire.com/articles/46171-women-of-influence-2018

In order to make HousingWire’s list, the editorial staff considered women who are making notable contributions to both their business and to the industry at large with a specific focus on contributions made in the most-recent 12 months. Their energy, ideas, achievements, as well as commitment to excellence also played a part in naming the awardees.

“I’m extremely honored to have made the HousingWire’s Women of Influence list,” said Patty Arvielo. “I’m proud to be able to impact people’s lives, make a difference in my community, and to serve as a mentor to both female and male employees.”

Arvielo is deeply involved in the National Association of Hispanic Real Estate Professionals (NAHREP) and serves as a member of NAHREP’s Corporate Board of Governors. She also serves on the Diversity and Inclusion Committee and is a member of mPower for the Mortgage Bankers Association (MBA).

As Co-Founder and President of New American Funding, Arvielo manages operations and sales for the headquarters, approximately 160 branches, and about 2,900 employees. She has expanded the company into one of the fastest-growing mortgage lenders in America. This year, Profiles in Diversity Journal named her a Woman Worth Watching for 2018 and she was also awarded a silver Stevie® for Woman of the Year.

This is Arvielo’s third time making the Women of Influence list.