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Home · Property Management · Real Estate Investing : House-Flipping Horror Stories That Will Make You Very, Very Afraid

These days, it seems like everyone wants to make a fortune flipping houses—and it’s not hard to see why. Reality TV makes rehabbing look like a fun, quick, and easy route to big, big profits.

Reality check: As any pro can tell you, this is not always the case. To set the record straight, we asked industry experts to share their more traumatic house-flipping horror stories, and the lessons they learned on those jobs.

Read on for some of the scariest real estate nightmares you’ll ever hear. Remember to keep the lights on!

The case of the missing cabinets. And dishwasher. And fridge.

“One of the worst flips I have experienced involved being burglarized three times. I was rehabbing a corner unit in a low-income neighborhood. We were almost finished with the rehab when we noticed the cabinets had been stolen off of the walls. A few days later, the dishwasher was gone. Two days after that, the refrigerator was missing, too!

“We found the culprit when pulling up to the property early one morning and seeing our refrigerator sitting in the neighbor’s front yard. After going over there to confront the buyer, we found him installing our cabinets into his kitchen. We recognized him: He’d posed as a contractor to give us an initial renovation estimate. We didn’t take his bid, but on his way out he broke the handle on the garage door to prevent it from locking. After that he started using the garage to enter and take whatever he wanted.” – Carol Sankar of Carol Sankar Enterprises, Charlotte, NC

Lesson learned: “Today, we have cameras, alarms, and have started working in areas where there is a consistent police presence,” adds Sankar.

When flipping, it’s important to put safety in place to protect your investment. As in the case of Sankar’s broken handle, it’s also a good idea to regularly check your doors and windows for signs of tampering.

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Here’s what happens when you hook up a toilet to the kitchen sink

“In one of the first houses we ever flipped, we used the cheapest contractors we could find instead of the most qualified. I came to regret that decision while hosting our first open house when a prospective home buyer visited the restroom and found out the hard way that the bathroom pipes had actually been rerouted to the kitchen sink. When he flushed the toilet, its contents started spewing out of the kitchen faucet. It doesn’t get more horrifying than that!” – Allen Shayanfekr, CEO & co-founder of Sharestates, Rockville Centre, NY

Lesson learned: When hiring a contractor, the cheapest route can be risky—and can result in higher expenses when you have to repair shoddy work. Use the most qualified workers for the job. Read reviews, ask to see photos of comparable projects they’ve completed, contact references, and verify that the contractor has been licensed according to your state’s requirements. And factor this expense into your original budget; that way you know you have the cash and won’t feel forced to cut corners.

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What happens when workers go AWOL

“We were working on a property that was going to be a home run of a flip. I bid the work out to a project manager and everything went smoothly, at least until the floors went in. I eventually noticed that part of the floor was uneven, so I asked the manager to fix it. Instead, he had his team just continue. By the time I checked again, he’d laid down all the flooring with no corrections, then walked off the job, leaving us with a huge mess to fix.” – Andrew Thomas Greer of Andrew Thomas Greer Real Estate, San Diego, CA

Lesson learned: When flipping houses and hiring help, it’s always wise to visit the property often to keep an eye on how things look. As soon as you spot a problem, make sure it gets dealt with. Setting up a payment schedule with the project manager before starting the work will help you protect your asset and give contractors an incentive to keep working until the job is done.

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A flip is never finished until it’s finished

“Two weeks out from closing, the temperature unexpectedly plunged to below freezing—and since the heat wasn’t turned on in time, a pipe burst in the home and 4 feet of water filled the basement. The damage was extensive; we had to replace the water heater and furnace and bring in water damage specialists to save the hardwood floors. Needless to say, we had to postpone the closing.” – Mark Ainley, GC Realty Investments in Bartlett, IL.

Lesson learned: Don’t mentally put a property on the back burner because it’s on its way to closing. Assign someone to visit the property regularly to make sure that everything remains in working order, especially in conditions where it’s inadvisable to leave a property unattended, such as cold temperatures or heavy rains.

 

Source: realtor.com

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