Biggest Red Flags When Buying a House (Flips & Rentals)

[@bennybronco76]

Hey James, First off this isn't any gas but let me tell you, we really are appreciative of the time and effort you guys put into these videos. A lot of times ppl think, "things just happen." You guys give and provide a wealth of information, especially for us newbies. I mean it's really invaluable. The care and accuracy of the information is a testament to you guys loving what you do. I want to give a sincere thanks to you guys, you do great work. Cheers🍻

[@ProjectRE]

Hey Benny! I really appreciate the kind feedback. We all have to help each other and we will keep on the content!

[@diegotheyorkie1420]

True! Newbie here too in FL looking for properties to either flip or BRRR...good luck out there!

[@ProjectRE]

@@diegotheyorkie1420 get after it 💪

[@ProjectRE]

Hey BiggerPockets viewers! James here 🖐 Red flags everywhere! I hope you all enjoy this week's new episode 🙏

[@avisocho]

Love it!

[@ProjectRE]

@@avisocho Thanks for watching Troy!

[@r.a.8590]

This was a great video. Nice work!

[@The1SimLash]

Excellent job breaking down the inconsistencies. I've noticed a lot of licensed people don't want to pull permits and deal with the city, so on the flipside you could have a really nice place that's up to code with no permits.

[@yanickjimenez]

It as great! And veryyyyy scary 😬

[@timbankes6556]

This dude is a real estate hit job detective 🕵️. He knows how to observe what was done and guess why they did it.

[@ProjectRE]

Ha! On the 👀 out!

[@adolpholiverbush5867]

Jesus Christ. Talk about someone full of SOOOO much knowledge and value.

[@ProjectRE]

Thanks Zack!!!

[@samanthajames3596]

by far the most helpful & educational video I've ever watched on buying a flip

[@ProjectRE]

Thank you!!!

[@mystuff7544]

This is the best walk through/inspection video I have seen.

[@ProjectRE]

Thank you! Check out our KZbin page for similar ones!

[@alanswanson1952]

I don't think I have ever saw a house that hacked up and I live in an area where a lot of vacation homes have been converted to full time. My last one built in 1945 was not that bad and I still completely tore it down to studs and re did the electrical plumbing and insulation.

[@ProjectRE]

There is always a worse one out there… 😂

[@yonmoore]

Great video. My two cents is that licensed professionals are still learning on the job, and while hiring them lowers your chances of having issues, it's still no guarantee. Overall fantastic information.

[@ProjectRE]

We buy everting on no inspection, but newer people should definitely higher a progressional if they are new or not comfortable with the scope of work.

[@tadehmirzakhanian893]

@@ProjectRE I bought two duplexes but I cannot possibly take the risk and buy without an inspection…still new

[@b.michaelbrown1117]

James is the. Chef ramsey of fix and flips

[@yonmoore]

The bit about looking for lag bolts that attach the deck to the house - a good friend of mine had his deck collapse while he was grilling because no lag bolts were used for the ledger board. Thankfully he recovered from a concussion and burns from his grill falling on him when his deck collapsed.

[@ProjectRE]

Building decks with no engineering…. Dangerous.

[@Xanthrochroid]

22:00 There are code minimums for distance between outlets, no requirement that they be evenly spaced. More important in the kitchen is that outlets be GFCI units within a code specific distance of the sink, and any installed in bathrooms must be GFCISs.

[@ProjectRE]

Exactly!

[@johnpdd]

3 ft rule on counters. Any counter appliance should work with a 3 ft cord. 6 ft rule on floors.

[@101realtor]

Also, the older the home, especially if it’s not been updated, the less likely you are to find any logic or rules around spacing

[@Lefthandedscorpio]

This was the best! Education first then a slow walk through with explanation. I’m looking for our first investment property, I’ve learned so much!

[@ProjectRE]

thank you!!!!

[@PiyushJaybhayeMusic]

from that extra box of a room someone can dive straight into the pool lol

[@ProjectRE]

easy access haha

[@gjmbarusha6999]

Dang, basically that house is a tear down….Tom Hanks approves the rehab tho.

[@ProjectRE]

It’s fixable!

[@doppelgangerprinting4235]

Great video even as an experienced contractor. I 2nd the oil tank issue, unexpected soil contamination can cost an extra $20k easy.

[@ProjectRE]

Always get plia insurance!

[@Xanthrochroid]

‘Home’ inspectors vary enormously in the actual value they offer. The woman who inspected the first house I bought (to satisfy the lender) was clueless. Per her contract, she didn’t look at the roof, in the attic, or move any furniture, which meant she missed a great number of faults. Consider hiring someone who knows construction, but without a vested interest in finding things in need of repair; e.g. an architect.

[@ProjectRE]

Agreed!

[@alparun4571]

Lol...never trust women on home inspection and men on babysitting

[@tj-1854]

@ 31:15 look at the bottom of the door behind James.

[@ProjectRE]

😂 good catch!

[@TheWorldFromFerg]

Im a critic of bigger pockets but I really found great value in this video, thank you.

[@ProjectRE]

Thank you!!!!

[@MrDraxz]

My god man, Would be scared to bring ya to my a couple of my houses in the North East lol. Jerry Rig is the game up here.

[@nickludwiczak1166]

Thank you James. You might be my favorite bigger pockets person, besides Brandon Turner of course.

[@ProjectRE]

Thanks nick!

[@sounddepth]

Not gonna lie… you have the best videos on this channel rt now!

[@ProjectRE]

Thank you! Feel feee to share!

[@gyo1439]

God damn, this house makes me feel alot better about the stuff I DIY

[@ProjectRE]

😂. Me too!

[@careya]

Another tipoff is molding installed upside down or the wrong type used (baseboard used where case should be used). And missing GFCI outlets. And drywall flush with door moldings.

[@erving123a]

This dude is legit. More vids please!

[@ProjectRE]

Thank you!!! More to come!

[@jamesdainard4242]

Thanks!

[@johnhanselman6371]

Super gluing a door to the brick, lol. Definitely water damage in the basement. They raised the electrical outlets because of the wet basement. lol .

[@Nick-qv3zg]

Lmfao man that house is something special. A bunch of guys drinking beer just nailing sh*t together!

[@ProjectRE]

For sure! Ha

[@TommyP0163]

This video is pure gold! Thanks for the info and please keep it coming 👍

[@ProjectRE]

Thanks Tommy!

[@thesuccessfulimg6885]

Would love to see what happened to this house!

[@ProjectRE]

We will post updates on our channel!

[@MattLaughs]

Would a home inspector go through the efforts to pull permits and verify all renovations were permitted? To my knowledge, inspectors are required to catch literally everything weird with the house.

[@mapuche888]

I've never had a home inspector pull permits. I'd rather have a contractor inspect.

[@101realtor]

Inspectors are pretty much visual only. Better to higher a contractor who is very knowledgeable about code if you want this level of detail. I want to say a majority of homes in CA have non-permitted items just because permits here are such a pain the a** to obtain and time consuming. Most clippers lose a lot of money doing thing the proper way. Wish more would though!

[@drewangell1457]

Thanks! This is the type of video that will get you more and more views because it's a good one to keep coming back to. Please, make more of this style content. :)

[@ProjectRE]

Thanks drew!

[@casey.connors]

I have never shaken my head or laughed so hard at one of his videos. Great stuff, the key is in the details! Did he find a TON of things wrong with this, yeah, but with the right offer - he can make this house work financially on paper with the purchase price and rehab costs. Great job!

[@nadegerichard6213]

Awesome video!!! 👍🏾 I learned SOOOO much. Thank you.

[@ProjectRE]

No problem, thank you for watching!! 💪

[@joerandom]

So in terms of budget and potential profit, given what you paid for the property and all the issues that need to be done, is this specific property profitable after all the expensive to fix it and by how much can you profit?

[@ProjectRE]

As long as you account for all the issues it can be. We factored to redo everything.

[@ProjectRE]

We run everything on a 6 month basis, we target 35% cash on cash return. Longer the project we adjust the expected return.

[@sherrynichols2570]

Outlets at that 48" height tell you that was at one point a garage... thats the required height for a garage.

[@ProjectRE]

Great tip!

[@dontbuyprelude]

no its not. the only requirements for garage outlets are they must GFCI protected, at least one outlet per car/bay, and can not be installed higher than 5.5ft up the wall.

[@Ceoguywithai]

This raises so much of genuine curiosity to understand the flow of Any house. Please recommend some literature to get an idea of what the norm should be . Great Video as always. Thanking James again for his invaluable inputs. Looking forward.

[@ProjectRE]

Really depends on the style of home. Do you have specific flow questions?

[@Ceoguywithai]

Is a focal point important to tie up a room together? Do you like partial walls in bigger rooms? What's your Aesthetic philosophy that you take as a benchmark while working?

[@yonmoore]

I'll chime in. I would say that noting the "flow" of a home is more of an art than a science. The way I define it is whether or not I see anything weird. And by weird I mean walls odd sized and shaped spaces, spaces that don't seem to have much of a purpose, and that sort of thing. It's a little bit difficult to define. But I feel like I also need to point out that a good deal is a good deal and as a rental, for the right price (which will be slightly lower if it's "weird") people will be happy to live there and pay rent every month if the place is clean and well maintained.

[@bellad1063]

When he said let’s check out the basement.. 😮 wait there’s more?!

[@alhent]

This was eye-opening!

[@ProjectRE]

Thanks Andrew!

[@yooniecho6394]

Thanks James for this insightful content. Eye-opening and substantive.

[@ProjectRE]

Thank you Yoonie!

[@thesuccessfulimg6885]

This is great!

[@ProjectRE]

Thank you!

[@edwinmachado7964]

There’s so much information on this video 🤯 thanks!!

[@ProjectRE]

Thanks Edwin!

[@JakeRichardsong]

The shake test and the pole falls over, rofl. OMG what owner does that?? Fake poles?

[@ProjectRE]

😂

[@kendigjl]

So glad I found this channel, as I'm looking forward to making my next investment decision in September of 2022 and will possibly go "all in" cash wise with every nickle I have in order to get more leverage. Thinking about things like the square footage matching the permitted square footage is going to help avoid getting myself into trouble.

[@jamesdainard4242]

Good luck on the purchase!!!

[@Tayy]

How did that work for you?

[@netsiwselarch5538]

Great content!

[@ProjectRE]

Thanks!

[@richardrowe1538]

In reality, if I found additional square footage added to the house without a permit, I will not pay for that square footage in my purchase agreement. Unpermitted square footage really has little or no value.

[@ProjectRE]

Agreed, you should always buy on the present structure but run the proforma on the stabilized

[@BooGualla1]

nice video! you should make one showing us how you came out still making money on the property !!

[@Mrmike710]

Very informative 👏 👌 👍

[@ProjectRE]

Thanks!

[@ryansatchell2302]

Anyone else laugh their ass off the whole time? LOL This dude doesn't play. "Come look over here. Yea this isn't done well at all, probably had a few beers and put this together with his buddies on the weekend. Yea we're going to have to redo everything. Weekend warriors". lmao

[@ProjectRE]

😂 all true 🍺 🏠

[@johnpdd]

40:20 you could add a beam under the deck next to the house that would support it.

[@ProjectRE]

Still needs to be lag-bolted to get it to code. Footings would need to be upgraded as well.

[@johnpdd]

@@ProjectRE Beam could be bolted into the house framing. There might be an issue of interfering with the windows.

[@youtubecarspottersguide1]

cheap skates flips .quick cheap unpermited flip and run. first thing I notice is no fridge its $1000 it matches the rest of the appliances

[@ProjectRE]

Was a long term rental!

[@youtubecarspottersguide1]

@@ProjectRE I have fridges in all my rentals one has a washing machine left by a tenent

[@kukuna2012]

Hi James, what a phenomenal video. cut to the point without wasting any time. Do you have the video after the revelation? I am curious how it turned out? and how much did it cost compared to the initial budget? thank you so much!

[@ProjectRE]

check us out on Project RE youtube and you will see!

[@Nick-qv3zg]

"And here's yet another telltale sign" ...lmao

[@ProjectRE]

😂

[@aldiaz5140]

Excellent video, and extremely helpful. You better believe I will be doing the shake and kick test going forward!

[@ProjectRE]

Appreciate the feedback and thankful this video was useful for you Al! 🙏

[@smoothdahustla9729]

Sadly, that reminds me of the rental I'm living in and also of something my family members would do to their house thinking it will raise the value of their house.

[@RichardSilvius]

This was fascinating... but this house seems to have so many issues... how will this be profitable for you?

[@ProjectRE]

All based on the the discount to market. Buying a fixer is ok - as long as you account for the work.

[@RichardSilvius]

@@ProjectRE I guess what confuses me is you seemed to say in the video you had already agreed to close on the house before discovering how bad the issues were. So was the price just so amazing that you knew going in you’d be able to make money even if you had to spend tens of thousands more than you anticipated?

[@bikingwithmykids7358]

Thanks for this great and through video. Would be cool to see the house when it all fixed up in another video.

[@ProjectRE]

We will post on ProjectRE KZbin!

[@buildingAbiz]

This was like the ULTIMATE house to make this video on lol wow... its like everything that someone could have hacked together was actually tried out on this one😅

[@ProjectRE]

Ha! Seriously!

[@craigpfeffer4369]

Awesome!!! Such valuable information. Thank you.

[@ProjectRE]

thanks Craig!

[@falsificationism]

Wooooooooooah that house. Almost as if they built it to be the perfect example of what not to do. Learned so much from this. Thanks!

[@ProjectRE]

Thank you!

[@Tresador]

Sheesh! Might as well build a house! My goodness!

[@ProjectRE]

Ha, we basically do on the inside walls.

[@kevinruiz8160]

Just because the floors aren’t all the same height doesn’t necessarily mean that it’s wrong and needs to all be torn out .

[@ProjectRE]

To hit the price we are targeting it is. All depends on the plan.

[@huckleberryfinn8795]

They superglued a post to the wall 😂😂😂

[@ChristopheLimpalair]

Super valuable and helpful. Thanks so much

[@ProjectRE]

Thank you!

[@RobWilliams007]

This was excellent!

[@ProjectRE]

Thank you!

[@tdf123emcee2]

Thanks for this!!! I want to get into flipping houses, I'm still saving up for capital but learning in the process this is so much info thanks!!!

[@ProjectRE]

You’re welcome!

[@buddyrevell511]

Was this house built or remodeled like this intentionally, for educational purposes? It's so bad it almost has to be that.

[@ProjectRE]

😂😂😂

[@Adrian-yi8fl]

I bet the Weekend Warriors wife shows him this video and goes "See? I-told-you-so!"

[@ezmoney6341]

Excellent video thank you for sharing your knowledge.

[@ProjectRE]

Thank you!

[@dhowto3005]

Thank you.

[@ProjectRE]

🙏🏻

[@svadlakonda]

Where can get the sheet to follow?

[@ProjectRE]

I will post the info on my KZbin channel!

[@jeffdorris5321]

Nice work 🎆

[@ProjectRE]

🙏🏻

[@Needhelp281]

Answer is D

[@ProjectRE]

Demo

[@vivianlandrum8507]

Thank for the walk thoughts. Very helpful.

[@ProjectRE]

You’re welcome Vivian!

[@MrNemitri]

I liked this video, however, where I live, the houses are completely on concrete, not wood, still, very informative what to look out for in houses.

[@ProjectRE]

Each geographical locations have their own issues! Got to be on the look out for issues in your local market

[@zevweisdorf6683]

This is a nightmare, watching this Spiked My cortisol

[@ProjectRE]

Welcome to my life 😂

[@Wannakatana2112]

Don't you get or do a house inspection?? How could you buy a falling down house without knowing? LOL

[@ProjectRE]

We don’t! I prefer to inspect myself

[@terryzdallas]

This guy could never make money on a rehab. Never. If he was around me he would drive me crazy.

[@ProjectRE]

still practicing ha

[@dudewheresmyguitar21]

Ok but why can they sell YOU the house as is but you need to do everything to code fir you to sell…?

[@ProjectRE]

Off market as is sale. Sold at a discount. All comes into play.

[@dudewheresmyguitar21]

@@ProjectRE got it 👍🏼 was just curious what the deal was! Thanks man

[@DanLee1969]

That deck was going to be a wedding party disaster when they put too many people on there.

[@ProjectRE]

💯

[@bellad1063]

Why am I having anxiety and I’m not buying anything?

[@ProjectRE]

Just don’t buy this one 😉 😊

[@evgenyonishkevich8494]

Woow whata project! Great content!

[@ProjectRE]

Thank you!

[@nellosnook4454]

I’ve seen horror movies that were less scary than this house. How could such incompetent people come to own such a huge house only to screw it up so badly?

[@ProjectRE]

Ha! They were trying to be Bob Villa…

[@JakeRichardsong]

Helpful, thanks.

[@ProjectRE]

🙏🏻

[@priestesslucy3299]

Ugh, city permitting is the dumbest thing in real-estate.

[@ProjectRE]

Can be soooooo painful. They could improve this x10

[@TheNathanBorgman]

who is doing rewires for under $5sqft? thats incredibly low

[@ProjectRE]

That’s just for rough in. We have a dozen that do it for that. Panels, lights, trim out are separate

[@abefma1358]

I think the biggest lesson to learn here is not necessary to worry about if the proper permits were pulled. Rather, don't do business in woke liberal cities where the government squeezes TF out of business owners. Not every city is up entrepreneur's as* like Seattle is.

[@ProjectRE]

Tough city for permits.

[@bldfinancial]

🔥🔥

[@ProjectRE]

Thank you!

[@RagnarLothbrok2222]

Why not just hire a professional inspector?

[@ProjectRE]

You should if your newer. Personally, I feel confident in discovering the issues and possibly catch more than an inspector.

[@nervousstranger]

Weed+construction supplies=this house.

[@ProjectRE]

😂 seriously!

[@kaylag.8411]

Just tear it down 😂

[@ProjectRE]

It’s fixable!

[@laotzu1111]

What a nightmare house lol

[@ProjectRE]

Everyday life for me 😂

[@idontevenknow232]

Omfg. So much money poured into materials wasted. Wow.

[@ProjectRE]

I think a lot of them were bought at a scratch and dent 😂

[@johnpdd]

Someone had just enough skill to cause trouble.

[@peterfinfrock2377]

They built it good enough... because you bought it.

[@ProjectRE]

I’ll buy anything at the right price!

[@intewiseinvesting184]

If "tear the whole house down" was a person😂😂😂😂😂😂. So basically you're saying you have to redo the whole house lol.

[@ProjectRE]

She needs a little love 😂

[@melaniegenuinely]

@@ProjectRE 😂😂😂😂😂😂😂

[@melaniegenuinely]

@@ProjectRE you are a very thorough individual. I appreciate ya.

[@dumpsterfire6351]

That house is a MESS

[@ProjectRE]

Completely, but so much potential!

[@OracleMoon]

This house was renovated using KZbin 😭

[@ProjectRE]

😂

[@zayzay1ize]

Omg, this house sucks, I rather buy a potential full remodel then have to fully remodel someone else's weekend warrior crap.

[@luckyfoot2]

I’m a weekend warrior, AND I KNOW I could do better than this

[@ProjectRE]

Ha, I’m not and I think I could too!

[@stephengilstrap]

Wow that house has a huge list of bad mistakes. Ill pass

[@ProjectRE]

All depends on price! Everything is fixable!

[@eudygomez6766]

🚩🚩🚩🚩🚩🚩🚩🚩🚩🚩🚩🚩🚩🚩🚩🚩🚩🚩🚩🚩🚩🚩🚩🚩

[@ProjectRE]

😂