If you are looking for a San Diego home between $200,000 and $900,000 you may very well run into some properties for sale that have been "flipped" by investors (especially if you are looking for a home under $500,000, from my experience). Many investors have been buying homes for the last few years, fixing them up (giving them a facelift), and putting them back on the market. These investors are obviously looking to buy low and sell for a decent profit. Some of these investors, from my experience, are actually pretty large companies that are "flipping" more than 100 homes in a year, while others are smaller outfits, perhaps first-time investors (and everything in between).
One interesting thing is that these investors typically are buying homes that many people would never buy (due to the inferior condition of the home) and doing whatever work they deem necessary to make it attractive to buyers. Sometimes, however, investors are able to purchase a home that is already in pretty nice condition and only have to do minimal repairs/cleaning before putting it back on the market.
Another interesting thing is that these homes are often some of the nicer homes on the market, and many buyers seem to really be drawn to these properties. The common features that I've noticed in many of these investor-owned properties include nice landscaping, new exterior and interior paint, new flooring, and newer kitchens and bathrooms. Of course, every home is different, but once you've been in several properties, you can easily tell which ones are the investor-owned properties.
The obvious benefit of buying an investor-owned home is that there is less work, time, and money required to get the home in the condition you want your home to be in (since the investor has already done much of the work). Some investors also are very customer-service oriented and are willing to do a lot of little fix-it type of repairs after you do your professional property inspection.
However, there are some disadvantages:
(1) Most often, the seller will probably not provide you with disclosures about the property (since the seller probably has never lived in the property). It may be difficult to determine what problems the property has had in the past, so your professional property inspection will be even more important.
(2) Depending on your loan type, your lender may restrict you from buying a "flipped" property for a certain amount of months. These rules seem to change often, so ask your lender about the current rules.
(3) While many investors may do a really nice job fixing up their properties, others may try to do the least amount possible, just trying to make a quick buck. In some cases, they may even paint over stains or cracks that they don't want you to notice. Again, your investigation of the property and your professional home inspection(s) are super-important for turning up any red flags about the property.
(4) These properties tend to attract more buyers, so your offer may be competing against other offers, but that could be the case with non-investor-owned properties, as well.
(5) Some investors will want to adjust the purchase contract verbiage to benefit themselves in more ways than one, so you will want to carefully read any terms/addendums that they add.
Discuss with your exclusive buyer agent the possibility of buying an investor-owned home/condo, and construct a plan that works best for you and your home-buying goals.
Justin Gramm is the founder and principal broker of Globella Buyers Realty, your San Diego Exclusive Buyer Brokerage. He also writes this blog, "For San Diego Home Buyers."
Exclusive Buyer Agents do not list homes for sale and never represent sellers. They have no "inventory" to try to sell you. They can represent you in purchasing any home. They are specialists at representing buyers only on the buyers' side of the transaction. Exclusive Buyer Agents work to get buyers the best price and terms when they buy a home.
If you have excellent credit and plan to buy a home or condo in San Diego County within 90 days, contact Justin Gramm to hire an agent on your side of the transaction. Call Justin at (858) 437-2662 or E-mail.