As an licensed inspector and GC I am asked to evaluate properties all the time; today I was asked to look at a property where a novice investor is doing their first major fix and flip. Five minutes into the home it is evident that they were way out of their league. (I am still shaking my head on what I observed)

For $300 the investor could have hired a competent inspector to go out and evaluate same PRIOR to going into contract however being that most investors are cheapskates, this one relied on a handyman to look at it. Short story is that the handy man spent over $50,000 of the investors money for which 90% of the work now has to be torn out.

When all is said and done the investor will have spent over $140,000.00 in a neighborhood where the average home is around $70,000......... now tell me which would you rather be out.....$300 or $140,000. (I cant help but sadistically laugh)

For the last few years I have been doing more inspections on foreclosures where investors are looking to make a killing......... the problem is that many fail to realize that indeed you do get what you pay for..... one is not going to buy a property for next to nothing without having to spend quite a bit to make a return.

You make your money on the front end of a fix and flip.......IF.......... you approach the property with realistic repair numbers and a true assessment as to the after repair value of the home.

If your profits are based upon how much Joe the Handyman can save you then you will end up like so many novice investors before you...........broke and disillusioned.

Mistakes made on this particular property were.
1. Failed to know their own limitations (novice investors should not be taking on large projects)
2. Failed to seek competent advice as to the true condition of the home.
3. Failed get an accurate assessment of repairs needed including unknown variables that will crop up.
4. Failed to assess a true ARV (after repair value) of the property
5. Failed to hire competent and reliable professionals to do the work
6. Failed to oversee project or hire competent person to do same.

There is money to be made in fix and flips but you have got to know what you are doing.,...... watching This Old House and Home TV does not make one an expert. Quite frankly I hate many of those shows because of many of them are so unrealistic.

NC_Yank