Why Buying A DC House Flip Is Risky
Should You Choose ‘Shiny & New’ Or ‘Tried & True’?
What Is A House Flip?
DC house “flips” are homes purchased by a rehabber and “improved” for a quick resale profit.
Problem is, you can’t see what’s under all the pretty new paint, tile and flooring.

Why Are House Flips Risky?

Unfortunately, a good number of flippers focus more on cosmetic aspects of the home and less on its structural integrity or soundness of electrical, plumbing and mechanical elements. Their goals are speed and profit, not care and concern. And that’s the good news. Some unscrupulous DC and NVA flippers have been caught drywalling over serious structural issues that later became homeowner nightmares. While some flippers do a good job, flips are an area of great concern and should be approached with extreme caution. Their popularity has exploded in DC in the last decade, as have the number of serious construction issues and lawsuits. With little regulatory oversight for permitted and unpermitted residential construction in DC, bad behavior can be commonplace. Remember, anyone can decide to start flipping houses, whether they are qualified or not. Permits may or may not be pulled, and in our experience, DCRA inspections are often ignored. Often the properties are held in an LLC to limit liability, so there may be limited legal recourse if you experience problems. Flips are classified as renovations rather than ground-up construction, so they’re subject to spotty DCRA permitting and inspection rather than the much more rigorous building code new projects are expected to adhere to.

Protecting Yourself Against Bad Flips

  • Understand that no action that you can take prior to settlement will guarantee that the flip you want to purchase is a ‘sound’ home;
  • Try to get a pre-offer general inspection, HVAC inspection and Roof inspection. If there’s enough time, add a structural engineer for an opinion on the integrity of the foundation;
  • Start by checking into the property’s permits and inspections. Permits must be pulled for many renovations and inspections are required following completion of permitted work. Often, flippers pull a permit for a minor item, do major work, then forego the inspections. Make sure everything from kitchen and bath updates to finished basements, roofs and fences were permitted and inspected by DCRA;
  • Pay attention to the amount of time the flipper has owned the property. Have they put it on market as a ‘full renovation in two or three months’ time? A short turnaround may indicate shoddy or incomplete work;
  • Have your agent look up the history of the home. How different does it look in the listing photos then and now? These photos may also provide clues to the amount and types of renovations performed by the flipper. Compare them to permits!
  • Consider hiring a contractor to walk through the property with you, note the recent renovations and updates, then research them through DCRA. Laymen don’t always understand what should be permitted;
  • Work with an agent who knows rehabbing/renovation and can guide you through the proper inspections and protections during your offer and transaction. While they won’t take liability for your due diligence or choices, they can be invaluable in providing insight and resources.

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Information is believed to be accurate, but not guaranteed. Subject to change without notice. Realtors are not CPAs or attorneys and are not permitted to give tax or legal advice or interpretations. Refer to a tax or legal professional for all related matters. Any information provided on this site pertaining to such issues is not intended as tax or legal advice and is provided solely for the purpose of illustration. Resources cited are believed to be accurate but are not guaranteed.