7 Red Flags Investors Look For - Linwood Ellis Real Estate

7 RED FLAGS

Investors Look For (That You Should Too)
Spot Expensive Problems
Negotiate Better Deals
Avoid Bad Investments
Plymouth-Specific Insights
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Your Free Buyer's Guide from
LINWOOD ELLIS REAL ESTATE
Former Contractor • Active Investor • 40+ Deals in Plymouth County

Don't Walk Into a Bad Deal

Most buyers rely on inspections to catch problems. By then, you're already under contract, emotionally invested, and often pressured to close anyway.

After 40+ deals in Plymouth County and years as a contractor, I've learned to spot expensive problems during the walkthrough—before making an offer. This guide reveals the 7 red flags I look for in every property.

THE INVESTOR ADVANTAGE: Investors don't just look for problems—they calculate repair costs instantly and adjust their offers accordingly. This guide teaches you to think like an investor, spot issues early, and negotiate from a position of strength.
1

Foundation Cracks & Settlement

🔴 Severity: High | Repair Cost: $5,000-$50,000+
REAL COST EXAMPLE: Foundation repair in Plymouth - $25,000-$40,000

What to Look For:

  • Horizontal cracks wider than 1/4 inch (indicates pressure)
  • Stair-step cracks in brick or block foundations
  • Bowing or bulging basement walls
  • Doors/windows that stick or don't close properly
  • Sloping floors (use a marble—if it rolls, there's settling)
  • Water stains on foundation walls (indicates ongoing moisture issues)
BRIAN'S CONTRACTOR TIP: Not all cracks are deal-breakers. Vertical hairline cracks are normal settling. But horizontal cracks, bowing walls, or multiple signs together? Walk away or negotiate a major price reduction. In Plymouth's wet climate, foundation issues only get worse.
2

Outdated or Dangerous Electrical

🔴 Severity: High | Repair Cost: $8,000-$20,000
INSURANCE ISSUE: Many insurers won't cover homes with knob-and-tube or aluminum wiring

What to Look For:

  • 60-amp or 100-amp service (modern homes need 200-amp)
  • Knob-and-tube wiring (white ceramic knobs in basement/attic)
  • Aluminum wiring (common in 1960s-70s homes)
  • Fuses instead of circuit breakers
  • Two-prong outlets throughout (no grounding)
  • Scorch marks around outlets or panel
  • Extension cords used as permanent wiring
BRIAN'S CONTRACTOR TIP: Open the electrical panel during the showing. If the seller won't let you, that's a red flag itself. Look for rust, multiple wires on single breakers, or a panel that's warm to touch. Budget $12,000-$15,000 for a full panel upgrade and rewiring in Plymouth County.
3

Plumbing Problems & Water Damage

🟡 Severity: Medium-High | Repair Cost: $3,000-$15,000
HIDDEN COST: Sewer line replacement in Plymouth - $8,000-$15,000

What to Look For:

  • Galvanized steel pipes (silver/grey, installed before 1960s)
  • Low water pressure throughout the house
  • Rust-colored water when you run the tap
  • Multiple drain clogs or slow drains
  • Water stains on ceilings (indicates leaks above)
  • Sump pump running constantly (high water table issue)
  • Septic system age (30+ years = replacement soon)
BRIAN'S CONTRACTOR TIP: Flush all toilets, run all sinks, check water pressure. Ask when the septic was last pumped (should be every 3-5 years). In Plymouth County, many homes have older septic systems—budget $15,000-$25,000 for replacement if the system is 30+ years old.
4

Roof Age & Condition

🟡 Severity: Medium | Repair Cost: $8,000-$20,000
PLYMOUTH AVERAGE: Full roof replacement - $12,000-$18,000

What to Look For:

  • Roof age over 20 years (asphalt shingles last 20-25 years)
  • Missing, curling, or cracked shingles
  • Dark streaks or moss growth (indicates moisture retention)
  • Sagging roof line (structural issue)
  • Multiple layers of shingles (adds removal cost)
  • Granules in gutters (shingles breaking down)
BRIAN'S CONTRACTOR TIP: Ask for the roof's age. If it's 15+ years old, negotiate $10,000+ off the price or ask for a roof credit at closing. Don't trust "recently repaired" claims without documentation—I've seen too many Band-Aid fixes that fail within a year.

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5

HVAC System Age & Efficiency

🟡 Severity: Medium | Repair Cost: $5,000-$12,000
NEW HVAC SYSTEM: $7,000-$10,000 for Plymouth County homes

What to Look For:

  • System age over 15 years (typical lifespan is 15-20 years)
  • Furnace model number shows manufacture date (first 4 digits = month/year)
  • Rust or corrosion on heat exchanger
  • Loud noises when running
  • Rooms with uneven temperatures
  • No maintenance records (systems need annual service)
BRIAN'S CONTRACTOR TIP: Turn the system on during the showing. Listen for strange noises. Check the filter—if it's filthy and hasn't been changed in months, the seller hasn't maintained it. Budget for replacement within 5 years if the system is 12+ years old.
6

DIY or Unpermitted Work

🔴 Severity: High | Repair Cost: Variable, $5,000-$30,000+
INSURANCE/RESALE RISK: Unpermitted work can void insurance and kill future sales

What to Look For:

  • Finished basements with no egress windows (illegal bedroom)
  • Added rooms or additions without permits
  • Removed walls (could be load-bearing)
  • Amateur electrical work (wires stapled to studs, junction boxes exposed)
  • Mismatched or obviously DIY finishes
  • Seller can't provide permit history when asked
BRIAN'S CONTRACTOR TIP: Ask the seller for permit records on any renovations. Call the town building department to verify. I've seen buyers forced to tear out entire additions because they were never permitted. If it looks DIY, it probably is—negotiate accordingly or walk away.
7

Hidden Costs: Oil Tanks, Wells, Septic

🔴 Severity: High | Repair Cost: $3,000-$25,000
BURIED OIL TANK REMOVAL: $2,500-$5,000 (or $20,000+ if soil is contaminated)

What to Look For:

  • Buried/abandoned oil tanks (check for fill pipe outside)
  • Well water systems (test required, pump replacement $1,500-$3,000)
  • Septic systems over 20 years old
  • High radon levels in basement (mitigation = $1,200-$2,500)
  • Lead paint in pre-1978 homes (abatement = $8,000-$15,000)
  • Asbestos in old homes (removal = $2,000-$10,000+)
BRIAN'S CONTRACTOR TIP: Plymouth County has a lot of older homes with buried oil tanks. ALWAYS get a tank sweep before closing. If one is found, negotiate the removal cost ($3,000-$5,000 minimum) or walk away. Also insist on well and septic inspections if applicable—these aren't optional.

How to Use Red Flags to Negotiate Better Deals

Spotting red flags is only half the battle. Here's how I use them to negotiate as an investor—and how you can too:

STRATEGY 1: GET REPAIR ESTIMATES BEFORE MAKING AN OFFER
Don't just say "the roof needs work." Call a roofer, get a quote ($12,000), then deduct it from your offer. Concrete numbers kill seller objections.
STRATEGY 2: STACK YOUR RED FLAGS
One issue? Seller might brush it off. Three issues? Now you have leverage. I recently negotiated $40,000 off a Plymouth house by documenting foundation cracks, old electrical, and a failing septic system.
STRATEGY 3: OFFER MULTIPLE SCENARIOS
"I can offer $450K as-is, or $480K if you replace the roof and upgrade the electrical before closing." This gives the seller options and often gets you a better deal.
STRATEGY 4: USE INSPECTION CONTINGENCIES WISELY
Always include an inspection contingency. When issues are found, renegotiate. I've saved buyers $20,000-$50,000 by renegotiating after inspection on deals in Plymouth County.
STRATEGY 5: KNOW WHEN TO WALK AWAY
Some houses are money pits. If you're seeing 4+ red flags, the seller won't negotiate, or your gut says no—walk away. There are always more houses. I've walked away from dozens of deals that would have cost me later.

Hidden Costs Buyers Forget to Budget For

Beyond the purchase price, here's what most buyers don't account for in Plymouth County:

  • Closing Costs: 2-5% of purchase price ($10,000-$25,000 on a $500K home)
  • Property Taxes: Plymouth County average = $8,000-$12,000/year
  • Homeowners Insurance: $1,500-$3,000/year (more if near coast)
  • Immediate Repairs: Budget 1-2% of home value ($5,000-$10,000)
  • Moving Costs: $1,500-$4,000
  • Maintenance Reserve: 1% of home value per year ($5,000/year)
  • Total Hidden Costs: $30,000-$60,000+ in first year

Ready to Find Your Perfect Home?

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Name: Brian Ellis

Company: Linwood Ellis Real Estate / RE Empire LLC

Phone: (508) 322-1269

Email: [email protected]

Office: PO Box 864, Sagamore Beach, MA 02562

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