Homeowners Be Aware

The True Cost of Superficial House Flipping with Scott Wachter

• George Siegal • Season 2 • Episode 139

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June 11, 2024

139.  The True Cost of Superficial House Flipping with Scott Wachter

Buying a newly renovated home can be a thrilling experience, but the shiny surfaces and modern fixtures might be hiding a multitude of problems. In our latest podcast episode, we dive into this issue with Scott Wachter, a Toronto homeowner who faced unexpected challenges after purchasing what seemed like a dream home. Scott's story is a cautionary tale for all potential homebuyers, emphasizing the critical need for thorough inspections and due diligence. This episode explores the reality behind quick renovation flips, the hidden flaws they can conceal, and offers invaluable advice on avoiding the pitfalls of superficially upgraded homes.

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Speaker 1:

Have you ever bought a house only to discover that the quick renovations the previous owner made were more trouble than they were worth? Today we dive into Scott Wachter's story, a homeowner who thought he was getting a dream deal, only to find himself in a nightmare of shoddy fixes. Scott's home purchase seemed perfect on the surface New floors, sparkling toilets, freshly caulked bathrooms and modern LED fixtures. Floors, sparkling toilets, freshly caulked bathrooms and modern LED fixtures. But as the dust settled, so did the reality. These hasty renovations were not very good quality. We'll discuss the red flags to watch for, the common pitfalls of quick renovations and how you can ensure that your investment holds real value. Join us as Scott shares his journey through the trials and tribulations of correcting this corner cutting and learn how to avoid these costly mistakes. This episode is packed with insights that could save you a fortune and a whole lot of headaches.

Speaker 1:

I'm George Siegel, and this is Homeowners Be Aware, the podcast that teaches you everything you need to know about being a homeowner. Scott, thank you so much for joining me today. Well, thank you. Yeah, glad to have you on Now. I had put out a shout out looking for people that had interesting home buying experiences, and yours is kind of different. I mean, I figured it could be a problem, but I never really thought about how that carries over, because you like to think the person putting your house together and getting it ready knows what they're doing and has real value in what they're putting in there. So tell us your story. What happened?

Speaker 2:

So I'm in Toronto, which, if you're not familiar with, is a very hot real estate market.

Speaker 2:

It's very competitive, there's a lot going on, and I went from so I am a first-time home buyer in toronto and I did it at a time, uh, I did it literally in march 2020, like the, the doors closed on everything and I'm like, yeah, no, best time to do this, best time to do this is now, uh, and so there was a lot of just chaos and confusion and we maybe spent considerably less than we would have because everyone was confused. But part of that problem was that this home I'm in right now was an investment property that owned by a real estate agent who was also keeping his mom in it like it was. His mom was there just to keep it clean and tidy, but it was an investment property, which means he did a lot of house flipping, nonsense, and I I've invented the character for the general contractor, because all the work was done by one general contractor. You can tell not no specialists, no plumbers, no electricians, one j, one gc, and he's just a deranged man.

Speaker 1:

I call until uncle walter, because, uh, the, the number of things I've had to go through fixing yeah now, first of all, did you have a home inspection?

Speaker 2:

yes, we did do a home inspection, like it is part of a row of townhouses so it's pretty easy to establish what's going on. And we did spot, you know, we basically spotted some loose shingles. The problem is not anything deeply structural, it's just oh, this is the cheapest thing, like that. Literally one of my toilets broke and I get the plumber and it's like oh yeah, this is the cheapest one you can get from Costco. They break all the time this part. I've got a replacement valve for it, we'll swap it. But if it breaks again, I'm telling you to buy a new toilet. It's not worth replacing twice, fixing twice.

Speaker 1:

Yeah, especially is it a one story or two story, two story. The toilets being bad on the second floor can be a major disaster. Oh yeah, exactly, Exactly Now. Did you talk to other people in the complex? Did you talk to some of the neighbors and see how theirs was, or were there? Everyone is designed by somebody different. This guy just replaced the interior of yours maintain the outside.

Speaker 2:

The interior is up to everyone. I've been in a couple of people's other people's homes completely different looking. Since then, three different units have sold and I've definitely snooped them, like snooped the pictures to be like, no, what unit? One is the only one that's shaped differently. What do they get? And it's just their living room's slightly bigger.

Speaker 1:

You know, the integrity of the person doing the job is really so important, because when somebody's flipping it, it's like if I'm selling my house and you come in as the buyer and you point out two or three things that you say need to be fixed, I'm not going to go get top shelf repairs. I'm going to try to save as much money as possible. So if a flipper is doing that and all they're really concerned about is their profit margin, that's not necessarily in your best interest.

Speaker 2:

Well, and I mean both my in-laws died fairly close together, so I had to oversee preparing that house for sale. And, yeah, I bought 40 gallons of white paint and did all of every room in that myself, except one part where I needed a big ladder and I just paid a guy. But I had to redo, like I had to redo the bathroom, had to redo it. It was an ugly old pink seafoam, seashell, pink tile thing and I'm like, just just grab one of those one pieces. You know, you know the ones, you know the ones, and we all do it. In so many cases my frustration is just the install. We had vinyl floors, the slatted vinyl floors, and they were glued to the outside edge.

Speaker 1:

So when it gets cold the entire room is pulling away to the edge found, because it sounds like once you find one thing, it kind of reveals that, okay, there's no way they were just cheap here, and then you start finding a lot of other stuff.

Speaker 2:

Oh yeah, no, we've, we've, we've had to deal with some of the plumbing for the sink. Just connections between different pipes were very weird. It's like okay, this is, this is a gasket that I don't know what. Why is this fit with a gasket? I need and I don't want to just tear out plumbing and replace it found something, figured it out. Uh, there was some issues with, uh, you know, the kitchen sink fosket being loose and being installed so weird you can't even get up there with the proper tools. It's, it's, it just keeps going and it's like, again, none of these would have broken the deal, none of these. But if I'd, even, but if I'd had the moment to just shine a flashlight at some of the, at anything, I'd be like all right, you got to. You got to knock another five off for me to fix this.

Speaker 1:

Yeah, no, it's always easy to to fall in love when you're walking through a place and you're drawn to the area Maybe the fact that it's different, that it's new, that you're actually going to own it. So how would you go in with better eyes on something like that? Do you think you could have spent more time there? Do you think you could have maybe brought in? It sounds like your inspector should have caught a lot of this stuff.

Speaker 2:

I mean, I think part of it, part of it was just the stress of the pandemic. Everyone was like oh, what do we do? How long do we stay More time working the hand sanitizer than checking some of the other things? Like my current bone of contention and it's a thing I got to fix is just in the bathroom. There's one of these. You know one piece, led fixtures. You know the throwaway ones. This is going to burn out in three more years if I'm lucky. And I got to, and I got to. I got to chunk an entire fixture and I'm like well, that's dumb. I would have demanded a replacement before I moved in.

Speaker 1:

Have you done anything to hold the seller accountable? Did you do any reviews on his website? Did you contact him and say what did you just buy the cheapest crap you could find to stick in here? Is there any kind of engagement there?

Speaker 2:

So because the guy's a realtor, I've just been because the original owner was a realtor. I've just been telling my real estate guy. It's like, dude, this guy's this everything I've had to do. It's like, yeah, you know, just make Leslie, let's make sure everyone knows this guy is, you know, a pain in the butt and will try to hose you and glue your floors in place.

Speaker 1:

Yeah, you know, we should let people know that are listening. It's not just flippers. A lot of times it's builders. I think a lot of builders count the nickels so when their basic stuff might be garbage and then you ask for better quality and then you upgrade things around the house. But you have to be careful what part of the process you do that so you don't get change orders. You kind of have to do that early in the process. But when you're getting a house from a flipper you really have to know their reputation and what they do. And it might even pay to bring in somebody that's a designer or somebody that has some experience in those areas that can look at the floor and go, no, no, they didn't do this right. Or look at this, this doesn't line up right, these windows aren't square, this isn't right.

Speaker 2:

Why did they fill their front garden with rocks? This is another one. This is this is one I fixed. Is that, for whatever reason, the mother got sick of gardening out front, so she didn't. So, rather than just let that section go to grass, just just let that go to grass. Now, an entire flower bed, you know six by eight flower bed out front. Just dumped gravel, just gravel. Spent a whole day picking stones. I'm still picking stones.

Speaker 1:

Yeah, that's tough to. It's tough to get rid of those. I mean, they can be a good asset if they're used right, but if they're just using it to fill valuable bedding space, that's kind of frustrating. No, it was, it was. I had a just gravel garden. Now did you purchase a home warranty of any type, or are you just pretty much in this on your own? Pretty much on this on my own? Yeah, and then what's your long term projection of how long you'll stay in this place?

Speaker 2:

I, it's Toronto. I can't afford anything else ever.

Speaker 1:

So you're there for life.

Speaker 2:

Yeah, yeah.

Speaker 1:

Well, that's maybe won't be a problem, but yeah, that's annoying though, and we're talking about it. So there are certain things you have to disclose when you sell your house. I talk about some of the issues I've had with my house, and the main problem we had is the superintendent for the builder. It was his last job with the company.

Speaker 1:

So he clearly had checked out. Oh yeah, and that's frustrating, and so I always tell buyers you can't rush into something unless you're a major builder, good at contracting yourself and can go in and fix things. You really need to spend some time there and get as much information as possible, because you shouldn't reward somebody playing hot potato and throwing it to you and then running yeah, yeah, exactly. So what would you have done differently?

Speaker 2:

I think part of it was there were. I think I could have definitely been harder on the plumbing issues, like part of it was we had a we. This unit came with a garbage disposal. These aren't legal in Toronto. You can't have one in there, really. Yeah, it's um I. It's basically too much of a strain on the water treatment system and you get it. You get london style fatbergs otherwise. So they just ban garbage disposals. You got to go through the compost system is what it is so municipal, municipal compost pickup is part of the deal.

Speaker 2:

Is the ups, is the upshot so what happens there, though?

Speaker 1:

I mean, is that something that they it's, if it's illegal when you go to sell the house? Is that something you're going to have to get rid of?

Speaker 2:

well, part of the negotiation was is you can't sell me this house until you were till you pull it out. And he said, no, no, no, I will, we'll knock another. Whatever we'll, we'll knock another five thousand off the thing, and I'm like to, and you can pay a guy to fix it. And I think as part of that, I needed to just be able to go down the entire side of the plumbing for the kitchen sink and say, actually, whole new kitchen sink, you're giving me a whole new kitchen sink for this. Not just, not just getting rid of this, uh, this contraband, uh house home appliance. Have you gotten rid of this contraband home appliance? Have you gotten rid of it? Oh yeah, no, I got rid of it right away. I used it once just to hear the sound. I used it to destroy some tea leaves. I shouldn't say that Bylaw officer's going to chase me.

Speaker 1:

They might, especially in Canada. I had a guest on recently who was telling me that if somebody is a real contractor or doing legitimate work at your house, they're not going and buying the parts. I think it was a plumber that told me this. They're not buying the parts at Home Depot or Lowe's, they're going to a plumbing supply store. They're going up a notch because that's really the I guess we could say lower end for the consumer, but a real contractor is not buying their stuff there.

Speaker 2:

Yeah, that's right. That's usually the case. My day job is involved in creating podcasts for a group of lighting distributors. We don't deal with Home Depot. You deal with your local guy. You buy your cans and tubes from a regional member of Nailed right.

Speaker 1:

So at least you should easily be able to get rid of that light fixture in the bathroom.

Speaker 2:

Oh yeah, no, I well, he also my, my, my, because the whole this situation is distributed across North America. My home base, where I go to do work most, sometimes some days a week, also takes in e-waste. So sometimes I just walk in there and I've dropped 50 AA batteries in the bin. For them, it's great.

Speaker 1:

It's like hey, I killed two hard drives.

Speaker 2:

Here you go.

Speaker 1:

Nice, nice, do you have any idea if there's anything going on behind the walls? Okay, you, the obvious stuff you can see. Right, they didn't do. They didn't have the A team in there doing this work. So what about wiring? What about pipes connected behind walls? What about the stuff that could really cost you a lot of money?

Speaker 2:

So part of it was again. Part of the deal was this had an old-fashioned fuse box, actual fuse box for the main electrical panel, and I'm like, all right, well, I'm going to get a guy in to switch that to proper breakers. And he did a full breakdown and tested everything while he was in there.

Speaker 1:

Okay, that's good because that's important. You know, a lot of times if they're shortchanging you there, you know that can lead to fires, that can lead to all kinds of problems and I guess now you have to just be a little concerned. You know one of the things that we learned if they don't put the seal on the toilet right upstairs, they leak. They do, and yeah, so anybody with an upstairs bathroom. It's worth having a plumber come and check that.

Speaker 2:

If you're wondering, because the surprise of having it happen is not good yeah, exactly, and you know I unrelated, I had an issue with my, uh, my washing machine, not related to this flipper, but it was like, yeah, no, a solenoid in the valves blew and I was leaking water into my garage. I just had this during the winter. So I had just this sheet, this stalactite of water just constantly, just frozen water on one side of my garage and I didn't you know, I don't, I park outside, I only go, I'm only in there, I'm only in there to deal with garbage, really during the winter, and I'm not. And so one day, it's like one day, it's fine, open the garage. Two days later, that's a lot of water. I don't think I can close my garage because the ice is pushing the railing, you could have turned it into a skating rink possibly for some of the neighborhood kids.

Speaker 2:

Oh yeah, for sure, yeah, but you know the risk.

Speaker 1:

There, too, a lot of laundry rooms. You know they really should have some type of drain in the floor, and that's another thing to look for.

Speaker 2:

That's mandated in Canada actually Floor drainage. Anywhere where you're doing laundry has to have a floor drain so the drain wasn't working no, so this is, this is the dishwasher. This is the dishwasher oh, the dishwasher they said the washing machine, sorry, yeah sorry, I might have said washing machine, the dishwasher three and the valve blew out, electrical. You know the actual mag, the actual electrical and one valve blew out. So it's just constantly letting water in.

Speaker 1:

Do you sit?

Speaker 2:

there and wonder what's next. Oh, I have my suspicions. I have my suspicions. I'm hoping it's something really trivial, like I've got, um, I've got an awning for my backyard that is automatic, like it's on motor, it's motorized. Those were apparently installed, not part of the original build, but like five years later, apparently, one of one of the originals. One of the people to first move in was like yeah, took us like five years of arguing about what color they should be, because they all had to match. Of course, because we're in a townhouse complex, I don't think I can paint my garage door any color, but that specific shade of brown, pretty sure, but like a five-year fight and everyone's like and he, uh, denny the guy, he, he lived, he, he'd been living here 50 years. And he's like oh wait, yours still works, yours might be the last one that does that and if it breaks I will probably take it down and I will not be allowed to add a new one, because it would be a different color, even though no one else has one anymore.

Speaker 1:

So there are HOA rules in the place. Do you have to pay homeowners association dues every month? I do have to pay dues.

Speaker 2:

It's the rules aren't too bad, 're not I? I know I. It's not america bad. I hear the horror stories from america. It's literally, uh, like the rules are basically um, don't paint your doors weird colors. Uh, don't have seven dogs I think it's some number of pets and I think, oh, I got in trouble for having a sign out during the election. Nice, no political signs.

Speaker 1:

Well, you know, a lot of the problem is not having adequate reserves in case there's a problem. And when in my last documentary film we interviewed a woman in Panama City who lived in a duplex and both took a lot of damage but the person who shared the other side, the other owner, chose to sell out for pennies on the dollar and they weren't going to rebuild it, so her insurance company wouldn't let her rebuild her side. But there's a lot of rules in a townhouse complex or any kind of HOA ruled society where a homeowner really has to know what's going on.

Speaker 2:

Yeah, no, I do attend the meetings. I am annoying about them because I'm a crazy person, I'm a godless hippie and they're all old and hate me. But it's very important for me to explain that, to show up and say, ok, it's great that we have this much in reserve and that you're actually spending money whenever the shingles flap loose. But I'm like but have we considered rewilding all the back grass? You don't want people walking back there anyway. Let's just have ankle high, you know, mid-calf high wildflowers anyway discourages people from walking and we'll save half on our, on our lawn care guys. And they're like no, you're crazy, you're a hippie, it's wrong, it would look so untidy. And I'm like no, we just have a field of blue flowers, you dorks.

Speaker 1:

You know that's tough when you live in it. There's good and bad things in an HOA. You know, in my neighborhood there is no HOA, so people can leave their garbage out all week. You know, when there's no rules it can be just as bad as when there are rules. So it's really just a matter of what you can live with.

Speaker 2:

Oh yeah, I get that. I get that and I'm relatively lucky that I'm not. Again, I hear the horror stories from America where it's like, oh, you didn't have your recycling bins in within two hours. What are you talking about? What do you mean? You work as a surgeon.

Speaker 1:

Yeah, the people that are on those boards are usually. Some of them can be wound a little tight. So what would be your final piece of advice? Let's give some advice to anybody buying a house. We'll use this as our, as our topic is a flipper did a house and they're selling it to you. What's your piece of advice for anybody that's going to potentially buy that?

Speaker 2:

Oh, don't be afraid to be mean, do not be afraid to be really mean about all the things that seem petty. That seem petty Like when I sold the complaints I got from the buyer felt petty and I'm like, no, okay, now I get it. Now I understand. I mean my house wasn't much better shape when I sold it than this thing. But be mean, don't be afraid to be mean and bring your own magnifying glass.

Speaker 1:

Exactly, don't. If they don't like your questions and they don't want to answer, maybe that's not the right house for you. Yeah, yeah, it's tough, it's tough. Well, hey, I'm sorry for what you're going through, but you know, good luck. I hope it's almost done.

Speaker 2:

It's almost done, my heart. We did hardwood through the whole house Real hardwood, not engineered stuff. A lot of buy it for life sort of improvements.

Speaker 1:

Well, since you're going to be there for life, that's probably wise.

Speaker 1:

Yeah, yeah, exactly All right, hey Scott, thanks so much for coming on today. Well, thank you. All of Scott's contact info is in the show notes. I know a lot of you listening have experienced all kinds of things as either a homeowner or a renter. There's a contact form in the show notes. Fill it out and send it my way and you could be a guest to share your story on an upcoming podcast. Thanks for taking the time to listen today. I'll see you next time.

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George Siegal

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