Flippers search for clues to the true condition of a house, but sometimes their finds lead them astray.
As Property Wars began a new season on Discovery Channel, hopes were high and dreams were big.
“The sun is shining, and it’s a great day to buy a house,” buyer Ed said.
But, was it a great day to be the buyer after you got inside the house you bought sight unseen?
Do 'Clues' Really Mean Anything?
According to Discovery Channel, there are between 100 and 150 homes being auctioned off every single day in the Phoenix area—that’s a lot of opportunity. Whether it is opportunity to succeed or opportunity to fail, however, is not guaranteed. Because the properties are owned by the banks, they are locked before auction, and bidders cannot actually go inside the properties until they go from “bidder” to “buyer,” and the bill is paid in full. And, without knowing what might be good on the inside—and what might be bad—it is tough to know what to spend and still make a profit. So, the buyers often look for clues to what might be going on inside.
For example, a 960 sq. ft., 2-bedroom, ranch-style home in Central Mesa was one target for buyers in the season premiere. Ed showed up first, and began his detective work, digging in a dirt pile left by construction workers.
“Sometimes when contractors are doing construction on a house, they’ll leave dirt piles in the yard. You never know what you’re gonna find in there,” Ed explained in a camera cameo. In this case, Ed found a “P-trap.”
“A P-trap is the pipe that goes underneath the kitchen sink,” Ed explained further. “You replace the P-trap, you’re generally remodeling a kitchen. That could be a $10,000-plus in itself. … There’s no way I’m letting anyone else see this.”
Ah, the tricks of the trade.
The house had a brand-new roof—synthetic, important in the Arizona sun—but it also had an add-on that appeared to be poorly done and could actually detract from the value.
Opening bid was $30,500. Bidding on the home was not terribly aggressive—the crowd just did not seem excited about it—and Ed got it for $39,000. But, did his P-trap clue uncover a pot gold or a pile of lead?
The best part of the show is when the buyers walk into that home for the first time, and reveal just what they have—and, in this case, Ed and business partner Steve did not have much. Ed’s updated kitchen? There was NO kitchen! In fact, on first inspection, Ed and Steve found that there was no tub, no water heater, and it looked as if the new addition might not be up to code. Projected loss on first glance? $6,000.
So, would-be flippers out there would do well to take a note from Ed and Steve’s experience in Central Mesa this week: So-called “clues” mean nothing. Sure, on another home, Scott went through the garbage and found a catalog of upscale appliances and, yes, it did turn out that the home in question had the upscale kitchen he rolled the dice on it having. But, it just as easily could have been a catalog of dreams for the previous owners, and no kitchen at all, like in Ed and Steve’s disaster buy. But, luckily for Scott, his projected profit upon first inspection was $61,500.
Dream Big, Think Smart
Of course, would-be flippers with dreams of getting rich quick should be cautious. As Doug said as he celebrated a big score this week, with a projected profit of $46,600, “I’ve done this too long; you never know what you’re gonna get.”
But, as fans know, on Property Wars, they do get a little bit of everything.
Property Wars airs on Discovery Channel on Thursday nights at 10/9c.
Image: Discovery Channel