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House flip or flop: the pitfalls of restored homes - | WBTV Charlotte

Time:2016-11-19 06:53Shoes websites Click:

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As the housing market has improved and home remodeling shows gain popularity, interest in renovating and reselling homes has never been higher.

People want in on what appears to be a get-rich-quick idea but Wilmington is quickly becoming home to a lot more flops, than quality flips. 

There are different levels of renovations. Some houses only require cosmetic polish: new paint and appliances, but for this report, we’re specifically talking about older and historic homes.

These structures, some having already hit or about to hit their 100th birthday, have the most charm, the most work needed and are most likely to get labeled as a “lipstick on a pig” house. That’s the nickname given to any top-dollar renovated home given low-budget treatment.

For buyers, the first check they cash is an emotional one: Do I like this house?  But for renovated homes, that’s just the beginning of a long road to investigating the quality of work done to it.

“A lot of times when it’s a bunch of pretty stuff, you don’t know what’s going on behind the walls,” said Delinda Harrelson, President of Home Solutions Group.

Harrelson, Steve Dutton, and Doug Witt have been rehabbing homes for years, well before it became trendy. It’s always been hard work and will always be risky. 

“Now it’s like seagulls on a french fry,” said Dutton, owner of Swan Song Properties. “Everybody is trying to do this.”

Experienced renovators will usually do a complete remodel because of what’s lurking underneath, above and behind every square inch of an older home.

At one of his properties in the Carolina Place neighborhood, Dutton showed us a wall stud that for decades had been hidden behind the original plaster. It was deeply perforated by termites. With little effort, Dutton was able to pull away the rotted wood.

Quality rehabbers often take these old houses “to the studs” for this exact reason. It reveals damaged studs that can then be replaced and provides an open platform for new electric, plumbing and HVAC to be run.

Not every house requires this level of work, but low-budget flippers will hide problems like this behind a fresh coat of paint and try to sell the house at the highest price. It’s up to the buyer to investigate and not be dazzled by the look of new.

Plumbing, roofs, duct work and crawlspaces are the biggest problems and the most expensive. Investors who take pride in their work and name are going to address those issues but F-word houses use fancy fixtures and glossy surfaces for distraction. 

Stunning pendant lights and high-tech showers aren’t worth much if they’re still connected to historic pipes and ancient electrical systems.

“It’s really disappointing when I see the amount of shoddy, unprofessional work going on,” said Witt, owner of Witt Renovations. “Band-Aid it and make it look good. Throw a coat of paint on it.”

Not every bad flipper has unscrupulous intentions. Many just get in over their heads and have to cut corners. Given how much false information is out there, it’s easy to see why.

Experienced rehabbers point to the “gurus” who make routine stops in the Port City to preach the get-rich-quick gospel. They advertise heavily on local radio and social media, often using the face or name of a flipping reality TV star to promote their product. 

“Sometimes I’m really disgusted because these TV shows and seminars that blow through town, paint this as get rich quick,” Harrelson said. “It’s going to be work!”

Curious, we headed to a recent seminar with her.

The room quickly filled before a fast-talking speaker took the floor.

Most chairs were filled by retirees. Harrelson explained that with few people being able to live on their retirement anymore, they’re looking for a way to make extra money without having to go back to a full-time job.

When Harrelson coaches new renovators, the younger generation usually recites the same reason for getting into flipping: I want to quit my day job. Little do they know how difficult real estate renovation is and how much of their livelihood is on the line.

After a slideshow of promises, the room was directed to the back where for a “discount deal” of $2,000 for the next training program. This money would buy them another seminar and access into an exclusive opportunity of hidden real estate opportunities and investor funding - all of which could conveniently be done from their laptop.

The speaker showed a picture of his own computer stationed on a tropical beach to prove his point.

Meanwhile, Harrelson was feverishly writing on her notepad, helping to point out all the discrepancies in the information given. 

For instance, the speaker kept referring to the access participants would get to a database chock-full of pre-foreclosure homes in the Wilmington area. Was this some sort of secret treasure chest of information that only he had? Did that make the $2,000 training program worth it?

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