Buying a Flipped Property

     In today's market there are basically two different types of investors who flip houses. The first is one who buys a property with the idea of doing a little as possible to the property before putting it back on the market. Although the investor has done as little or nothing in preparation for the sale they still expect a maximum dollar for the house.
     Then you have the investor who  has formed a LLC, Limited Liability Corporation, and has access to contractors who are ready to make the repairs quickly and efficiently.  After the property is purchased they will have an inspector go through the house and make a list of all required repairs to insure it is in good condition before putting the house on the market.  They too want the maximum dollar for their investment. 
     In both of the above cases the properties will be put on the market for the maximum market value.  When showing houses that are being flipped I am weary of the first type of investor. These properties have a higher chance of hidden problems for the buyers.  Fresh paint may hide potential problems of moisture build up around the windows or a recent roof leak.  It is easy to determine which type of investor is selling the property by looking at the quality of repairs and what has been fixed.  In the case where you have a "want to be" real estate investor I make my clients aware any potential or hidden problems.  In the second case it is much easier to recommend the property to a client as long as they realize they will be paying top dollar for the house.  Paying the higher market value is not always a bad thing if you are getting a quality product that is move in ready and will require less maintenance in the long term.
    So it isn't always bad to purchase a flipped home for the upper market value if it is in top condition.  Would you not pay top dollar for a house from the original owner if they kept it in great condition?  In most cases it is a psychological issue with the buyer knowing some one is making a profit with an investment verses their home.  It is okay to pay the higher market value as long as you are getting what you paid for and not a lot of hidden problems.