Stephen Gaudet

Don't know if anyone caught this last week but sales of foreclosed homes was up while sales for new homes were down. Investors are buying these homes and flipping them for a nice profit. In addition, when you consider what it cost to build new you can't compare with these foreclosure homes some are real deals when you look past the cosmetic issues.

http://www.businessweek.com/news/2011-02-24/foreclosure-homes-sold-at-28-discount-last-year-as-supply-grew.html

Do the research yourself...google "foreclosure"

I have inspected a lot of short sales and foreclosures and they usually have one underlying theme which is the owner ran out of cash. In some cases the owner does not destroy the home in others they do. Therefore, you need to look at a lot of homes and build experience on whats out there.

Something else to consider if your the buyer of such a home. If a flipper does the refurbishment how good of a job did they do? In "some" cases they hide problems with just a fresh coat of paint.

Look closely at this hip roof. See anything wrong?

This hip roof that was shingled on the front and back only. Main reason is the neighborhood was so tight you could not see the sides. The sides are end of life and signs of water leaks were present in the attic. The house was being sold by an flipper.

I caught this because I get up and personal with every roof. Ground view shows you very little.

Some of these resellers / flippers are good at what they do, others are not. Keep in mind if your the buyer there usually is no warranty.

To my point, if your a buyer consider the main costs which are structural, roof, heating system, plumbing and electrical. If these are in reasonable shape or just one or two items need repair you may have a deal on a home at reduced costs. A good inspector can give you a punch list of issues that may be within your budget to repair or walk away. Structural issues in most cases you want to walk away.

Look past cosmetics, there are a lot of contractors needing work. So why pay more for a refurbished home someone else repaired that you may be able to do yourself?

I would also point out, there are investment groups out there having meetings on such properties. Find them, it costs nothing to sit in and see for yourself what's going on in the market place.

Cheers,

Steve

Well you can imagine my surprise when I noticed this furnace had no air filter.

Well that worked out well.

Enjoy,

This happened to me. Had a water pipe that leaked in my new home after about 16 months. What happen was a sheet rock screw was driven into my hot water supply and finally rusted away causing a leak inbetween floors into the basement.

The picture here is a water leak in the kitchen closet. Hum. Since it happen to me I went down stairs in the basement and checked the piping. Sure enough someone screwed directly into the bathroom above drain waste pipe.

Needs repair!

Enjoy,

Here's an interesting one. Someone upgraded the sub panel from fuses to breakers. However, can only imagine what they were thinking. As you see the electrical main 100 amp service runs into the fuse box, left side is ok.

However, someone used stranded wire from the supply side to the new fuse box and wired into a 100 amp breaker.

The correct way would of been remove the main fuse panel and go directly to the sub...make it the main and install the correct side 100 amp breaker using the correct aluminum feed wiring.

Safety hazard.

Note duct tape blocking old fuse openings...safety hazard

Enjoy.

Steve