Buying a "flipped house" - would you, have you?

[Downinthetubestationatmidnight]

I've seen a "flipped" house on Rightmove today, i.e. one bought and done up quickly to sell for a big profit. My friend lives in the area and knows of the vendors, she tells me this is the third/fourth time they have flipped and make around £100,000 each time when they sell a year after doing up. The vendors have FT jobs, this is something done alongside those. Nothing wrong with flipping of course. But, have doubts on how well the work would be done etc. Property has no extension done, work all cosmetic.

A hundted grand profit simply from cosmetic

Oops post by accident.

A hundred grand profit simply from cosmetic work ? Really ?

No. The work will have been done quickly and cheaply, the fixtures will be cheap and poor quality, and I resent putting money in their pocket for stuff I could have done myself.

I would be thinking of Sixty Minute Makeover.

But how does the price sit against other houses and how much is it? Quite possible to buy a large family house that has had nothing done to it in 50 years and add that value in.

I find the £100k profit hard to believe too, unless they're doing family homes in London that are £1M+ and buying those that have not been touched for decades for example. Especially if they also have a full time job, as it's either very hard work or an extremely tedious hobby or they have to pay professionals.

The flipping element wouldn't put me off, I'd go look at the property and make my own mind up about the quality of the fittings and workmanship.

It is anecdotal, but a friend of mine recently bought a 'flipped' house and only found out once he'd moved in how many shortcuts had been taken... Most notably, a fridge had been wedged into an alcove where there was no electricity supply nearby?

It is not overpriced for the road/area but I would be concerned about quality of work. It is vendors luck they got it so cheaply, don't know how they did.

It sounds unlikely to me that they'd make that profit on a cosmetic makeover.

Beyond that, I'd consider it but would look very very carefully at the work, the permissions, the quality and above all whether it was exactly as I'd want it. If there were things I wanted to change beyond paint colour then no, not worth it.

Having said that though...you have eyes. Inspect the workmanship yourself, or get someone to do it for you who knows what they are about.

Unless this house is in Wimbledon or Chiswick they’ll never make 100k profit after taxes, lawyers, incidentals and expenses.
Just because they bought something at 800K and sell it at 900k, doesn’t mean that’s clean profit.
Also, visit the place and make your mind up, shoddy jobs and cheap fixtures are so obvious.
Trust me, you can tell the difference between a Bulthaup kitchen, Magnet and one from budget line of B&Q.

It depends, is it favourably priced when compared to similar houses in that area and do you like the decor, fixtures and fittings? If they haven’t done any structural work then I wouldn’t be too concerned about botching, lots of people do stuff on the cheap even if it’s their home, avoiding a flip is no guarantee against that. Just don’t skip the survey and if you know any builders maybe get them to have a look round with you.

And £100k profit for purely cosmetic work doesn’t seem likely though. Are sure your friend doesn’t mean that they usually sell houses for around 100k more than the buy them? Which wouldn’t take into account their costs.

I paid for a full survey on a flipped house, turns out the basement wasn’t tanked properly, one bad winter and that would have been a swimming pool. If a survey turns up nothing it might be ok but I would get a full survey. On the “flip” side my parents have flipped two houses in 4 years just by moving around a lot and their homes were all upgraded with best quality products because they had intended on staying. They didn’t make so much back but both houses sold in 2 days

I don't understand the problem and fail to see what them having full time jobs has to do with anything. Presumably potential buyers will be having a survey which should uncover any problems. Are you jealous or something or just enjoy gossiping about something that doesn't concern you?

It is all very beige inside, nothing you could dislike but not what I would choose either. The previous house they sold 2 years ago was sold for £150,000 more than they paid 18 months after buying. I will have to view it and make my mind up.

My in laws bought a bungalow like this and have had no end of problems with it. Be careful.

But out of that £150k they will have paid stamp duty, other buying costs, interest on a mortgage (or lost interest on capital) plus the renovation costs, which could substantially eat into the gross profit especially if it includes a kitchen and bathroom, plus flooring and furnishings as well as decorating costs.

There is an upper limit of what you can spend on a house expecting to gain a profit. After that it's about saleability vs neighbouring properties rather than value. You could be lucky if it was a wreck and you got it under market value, but so many people are doing it now those properties are few and far between. Auctions could be good though, we haven't looked at those yet, but again I bet they are swamped with people wanting a bargain!

I know someone who buys a house every 2 years not to flip but gets bored. Every house starts out a wreck and gets so much love and attention and then she gets bored and moves on again.

She is now retirement age and says this house is her last. She moved in last year but I think she will move next year.

Flipped houses don't have to mean bad quality, any place I ever live in will get done to a certain extent as I can't live with others items and need it to be a certain way.
Maybe they are like that.

If you buy a house cheap enough or at auction you can make money. If you don't let renovations costs run away with you, do lots yourself and subcontract the rest.

Act as you own main builder and project manager and you can save loads.

@SilverySurfer what are you on about? She's thinking of buying it.

This thread reminds me of the Homes Under the Hammer series. The vast majority of those houses are horrendous when they are “done up” simply because they’re usually doing them for the rental market and it seems anything goes. We always joke that the time scale they give and the budget they plan wouldn’t even cover one room in our house whenever we decide to overhaul a room! The only decent makeovers are the ones where the people doing it are planning on living in the house themselves. As for Sixty Minute Makeover-the standard of work on that programme is invariably shocking. I’d absolutely HATE I’d anyone in my family decided to give that crowd free rein over my house.

Go and see it. I viewed one where this had been done and it was really obvious straight away.

“if anyone”...

I thought you meant an upside down house at first (bedrooms down other rooms up)

Gets coat.