Hidden Issues with Distressed Properties in Southern California

Distressed Properties

For real estate investors, purchasing distressed properties is the key to big financial gains. Distressed properties offer the greatest potential profits, but they also come with the greatest risks. Detecting hidden issues with distressed properties in Southern California requires a trained eye… or in some cases, learning from past mistakes. Below are a few common issues with distressed properties that can be well hidden.

Pest Infestations and Damage

If you’ve ever watched the show “Infested,” then you’ve seen many stories of families moving into homes only to find out later that there’s a huge pest problem. You may have wondered how those problems were not detected beforehand, but the reality is, the signs are not always obvious.

Infestations may be hidden behind walls, underneath foundations, or in other difficult to access areas. Pests are also known to “hide” from people, sometimes appearing only at night or when things are quiet. Additionally, some pests only access a home at given times, through unknown pathways. You may later expose problem areas when beginning renovations, or discover an infestation after spending a lot of time at a home and noticing subtle signs.

With experience and a close look at different areas of a home, you can start to recognize some of the common signs of pest infestation. Rotting wood, disguised excrement, and strange smells can be helpful clues.

Plumbing and Water Issues

Plumbing is among the common hidden issues with distressed properties in Southern California. Again, you may think that water damage would be obvious in a home, but they can often be quite the opposite. Minor leaks can continue for years behind walls or between floors before they appear on visible surfaces. The key is to recognize little signs of big problems such as slight discolorations, spongy/bouncy surfaces, mold, or disruptions to water flow,… just to name a few. Signs of old damage or leaks can also hint of ongoing or current problems.

Broken or Clogged Sewer Lines

Sewer lines are another major issue to look for in distressed homes. A quick home inspection will not always include a thorough look at pipes and drainage. In some cases, utilities may not even be connected, preventing these systems from being evaluated at all. Broken, clogged, or damaged lines can exist both inside and outside a home and are costly to repair. As a precaution, look for common sources of problems such as old pipes or the location of trees and other destructive elements on a property.

Issues with Structural Integrity

A home does not need to be visibly falling apart to have serious structural issues. Although structural problems may not be as common as the other hidden issues with distressed properties in California, they can certainly be one of the most expensive. As you pull down walls or pull up flooring, you may uncover damaged structural components or lack of certain support features. Sagging beams, uneven floors, and unusual layout changes can be signs of structural problems.

More on Hidden Issues with Distressed Properties in Southern California

There are so many considerations when evaluating a potential property for a fix-and-flip. As you prepare your budget and financial analysis, it is always important to remember that hidden issues with distressed properties is always possible. Depending on the type and extent of the damage, repairing hidden issues can completely throw off your budget and profit margins. Therefore, it’s critical to keep the above in mind and to look for any signs that they may exist.

If you fear that you may not have the past knowledge and experience to evaluate properties and detect these issues, consider partnering with Homes, Inc. Visit our Southern California Distressed Residential Asset Partnership page for more information.