House Flippers' Dream Homes Turn Into Nightmares

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House Flippers' Dream Homes Turn Into Nightmares

By Jennifer Kraus. CREATED May 12, 2014

NASHVILLE, Tenn. - A new national report says Nashville is one of the hottest towns in the country for house flipping.

But NewsChannel 5 Investigates has discovered that some home buyers who purchase these houses are finding their dream homes are, in fact, costly nightmares.

House-flipping shows on cable TV make it look easy and very profitable, which means a lot of people are jumping into the business.

While you might think that you can get a great, newly remodeled house with the latest features at a reasonable price, those who are familiar with house flipping in Nashville said you might want to think twice before buying a home that's been flipped.

Maria Stapleton started taking pictures of her kitchen ceiling when she first noticed large cracks in it.  Then about 20 minutes later, she recalled, "It was kind of like thunder, a good clap of thunder and boom."

The kitchen ceiling came crashing down.

"Just one fell swoop, it was done," Stapleton told NewsChannel 5 Investigates.

"Just fell down?" we asked.

"Just fell," she said.

"The whole ceiling?"

"The whole ceiling," Stapleton answered.

She purchased a house in Madison just three months earlier from a house flipper who'd bought it in foreclosure. The flipper took out some walls, added a deck and some paint, redid the kitchen and floors, then sold it.

And, the fallen ceiling, Stapleton said, isn't the only major issue she's had. She told NewsChannel 5 Investigates that her newly flipped home has turned out to be a huge flop.

"I don't know who would expect this, especially in a home that's brand new remodeled. That's why I bought it," she explained.

But Nashville real estate attorney Jean Harrison said, "It doesn't shock me at all. I see this on a daily basis."

Harrison told NewsChannel 5 Investigates that she represents a growing number of clients who've bought flipped homes from people who have little to no experience in remodeling or construction.

"They think that they're the next Donald Trump and they're going to make money doing this," she said.

Harrison said they focus on making the kitchen, bathroom, and flooring look nice, but generally don't spend the money to fix what's important -- like the foundation, roof, plumbing, and electric system.

"So the consumer is presented with a pretty house on the surface. You can put lipstick on a pig, but it's still a pig -- and these people are not fixing the house," Harrison stated.

In order to do the kind of major renovation work that was done at Stapleton's house, the person flipping the house should have had a state contractor's license and permits from Metro Codes.

But our investigation found that he does not have a state license -- and he lied to Metro Codes when he got his permits.

"They sheet-rock mudded over the plaster, adding a huge amount of weight to the ceiling -- which it couldn't bear because they didn't reinforce it," Stapleton explained.

She said her insurance company calls it shoddy workmanship and refuses to pay to fix it.

"I've been left here holding the bag," Stapleton said.

Natasha and Nathan Buttrey are in the same boat.

"We had no idea when we bought this house that it was going to have all of the problems that it does," Natasha Buttrey told NewsChannel 5 Investigates.

The Buttreys bought a home in Goodlettsville that had also been foreclosed on and flipped.

After their basement flooded, the Buttreys discovered that, when the house was renovated, major foundation problems were simply covered up with drywall.

"There were literally holes in the side of the wall structure downstairs,” Nathan Buttrey described.

And some of those gaping holes were simply filled with folded cardboard. And what was done to support the stairs?

"They stuffed boards under the stairwell,” Natasha Buttrey revealed. “Our stairwell is being held up by a broomstick and a couple of pieces of 2x4."

The Buttreys are now suing Paul Kazanofski, the man involved in flipping their house.

Kazanofski claims to have flipped hundreds of homes in the Nashville area. On his website, he claims to be an expert on house flipping. He also teaches seminars on how to do it.

He also claims to be a licensed contractor.

But according to the state of Tennessee, he is not. According to Metro Codes, he also did not get permits to do the work he did at the Buttreys' house.

NewsChannel 5 Investigates asked the couple, "How safe do you feel here?"

"Not at all,” Natasha Buttrey said.

We reached out to the men who flipped the two houses, and both turned down our requests for an interview.

Here’s what experts recommend:

To avoid these sorts of problems when you're buying a house, you'll want to learn as much as you can about whom you're buying from and what they've done to the house.

Find out how long they've owned it and how much they paid for it. Chances are, if they haven't owned it long and they paid way below market value, they probably bought it as a distressed property and are trying to flip it.

You'll want to check with the codes department to find out if they did any work on the house and got the necessary permits and inspections.

Not only should you get a home inspection, but you should also consider hiring a structural engineer before you buy.

Back to NC5 Investigates: Consumer Alert
NewsChannel 5 Investigates

 

Jennifer Kraus

Jennifer Kraus

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Jennifer Kraus is NewsChannel 5's Weekend Morning Anchor and a member of NewsChannel 5's award-winning Investigative Team.