1 Price - Before you even go to look at the property you need to make sure that the price is way below the market value of the real estate in that area otherwise you are wasting your time looking at properties that you cannot make any money on. So you need to make sure it is so far below the price of other house that you can fix it up, hold it, and pay fees and commission and still make a huge profit.
2. Foundation - I buy and sell real estate in Texas and foundation is a huge problem here, and it is the first thing I look at. If there is foundation damage you need to see how much this is going to cost to have fixed. Many times when I am looking at a property I can call my foundation guy and he will come out and give me a free quote on the spot. Foundation damage can drain a budget so until you are comfortable with you skills at judging the amount of foundation damage call a pro for a quote and then factor that in your budget. When looking on the outside and inside of the house you are looking for cracks above windows, along brick mortar, over doors, and in corners, and many times you can feel the foundation sinking in certain areas of the house. Be sure to walk to the corners on the rooms and you will be able to tell if the piers have sank.
3. Roof - Next I check the roof by counting the layers of shingles. Normally if there is over 2 layers of shingles you are going to need to replace the roof. Also, as you are walking through the inside of the house look up at the ceiling and look for water spots. This is also a huge indicator that you are going to need to replace a roof. Your foundation and roof are normally you 2 biggest expenses.
4. Walls - Look for holes or damaged sheet rock that is going to need to be replaced. Drywall is cheap and not a big deal, but does cause a lot of buyers to run away from the property. I love houses with holes kicked in all the walls. Holes = Money
5. Electrical - Look at condition of breaker box. If you are going to add something like a A/C unit you might have to upgrade the electrical, so you need to keep that in mind. Next if the power is on to the house you can check the lights and buy a cheap power test that you can plug in a wall to tell you if it has power, and you can get an idea if the electrical has issues in the house.
6. A/C and Heat - Check to see the age and condition of the air conditioning unit in the potential flip so that you can see if you might have to replace them and leave room in the budget if you think you might have to replace the unit.
7. After that cabinets - Look to see if you can use the old ones or if you are going to have to replace them all.
8. Counter Tops
9. Plumbing - Make sure the toilets will flush and water will run. The water heater is normally off so you can't test it, but you can look to see how old it is, and that will give you a ideal if you are going to have to replace it. See how many faucets, toilets, shower heads, and other plumbing fixtures you might need and factor them in the budget. I normally replace almost all the plumbing fixtures to give the house the new look.
10. Flooring - See how much of the flooring is going to be fixed or replaced. I always if possible refinish my hardwood floors, and put down ceramic tile. If there is no hard wood I will estimate the cost for carpet.
11. Paint - Don't for get to price paint inside and out
12. Appliances - I normally replace all the appliances, so you need to factor that in as well.
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