How to Spot Real Estate Red Flags That Are Actually Green Lights
- Wayne Hillier
- Jun 30
- 3 min read
Updated: Jul 7
By Wayne Hillier, Real Estate Investing Masters
June 30, 2025 | Edmonton, AB
In today's market, many investors and homebuyers shy away from properties that show obvious signs of trouble. But what if some of those so called "red flags" were actually hidden opportunities to secure great deals?
Let’s walk through a few of the most common property red flags and how to assess them with an investor's mindset.
Foundation Cracks: Understand Before You Panic
For most buyers, a crack in the foundation triggers alarm bells. But the truth is, most homes have at least one. The key is knowing the difference between structural and non-structural cracks. A few hairline cracks around basement windows? Likely non-structural. These can often be sealed for as little as $150 to $500. Meanwhile, fear over a minor issue could give you $5,000 to $10,000 off the asking price.
Water in the Basement: Diagnose the Source
Water in a basement might look like a disaster, but it often comes down to four causes: sewer backup, leaking drain lines, cracked foundation walls, or broken supply lines. Each of these has a repair cost. Some are as minor as $200 to $600. If you know how to diagnose the issue or bring in someone who does, you could take advantage of a discount others are too afraid to negotiate.
Old Interiors and Dated Finishes
Shag carpet. Wood paneling. Wallpaper from the 1970s. For many buyers, these outdated features are deal breakers. But for you, they should signal opportunity. Paint, flooring, and even kitchen refreshes can often be done affordably. In some cases, a property might even be rent-ready as-is, allowing you to generate income before upgrading anything.
Scary Electrical and Plumbing Systems
When a property has aluminum wiring or poly-b plumbing, many insurance companies hesitate to insure it. That alone can scare off buyers. But with the right knowledge, these issues are solvable. Pigtailing aluminum wiring, for instance, can cost under $2,500 and instantly restore insurability. As an investor, this is the kind of problem you should welcome.
Pests, Vacancies, and Squatters
Signs of rodents or squatter activity tend to trigger emotional reactions. But with proper inspection and pest control, these problems are fixable. Most pest issues come down to sealing a few entry points and setting bait. Squatters? Change the locks, secure the building, and clean it up. Again, opportunity shows up when others walk away.
Inspection Reports That Look Like Novels
A long list of minor deficiencies like leaky taps, cracked outlet covers, burned-out bulbs, can feel overwhelming. But often, this laundry list of issues can be fixed by a handyman in a single day. Investors who know how to price and bundle minor repairs gain the upper hand when sellers are pressured by long inspection reports.
Offensive Smells
Strong odors like cat urine, cigarette smoke, mildew, can be the fastest way to chase away competition. But they are also some of the easiest problems to solve. Deep cleaning, replacing carpets, using ozone treatments, and repainting with sealants can eliminate almost any odor. Most of the time, it’s not about cost, but knowing what to do and who to call.
The Takeaway: Learn to See What Others Miss
The ability to turn red flags into green lights is what separates struggling investors from successful ones. If you understand what needs to be done and the cost to fix it, you can uncover undervalued properties in any market.
Want to learn how to spot these hidden gems and build a portfolio that performs long term?
Join the REI Masters Mentorship Program and learn exactly how to position yourself for success in Alberta’s changing market.
Book your free discovery call today at www.reimasters.ca
Listen to Today’s Episode:
Real Estate Investing Morning Show – Hosted by Wayne & Gabby Hillier
About the Author
Wayne Hillier is one of Canada’s trusted experts in real estate investing education, specializing in Alberta’s thriving markets. Based in Edmonton, Wayne has over a decade of experience building a high-performing rental portfolio and coaching investors to achieve strong cash flow, sustainable wealth, and creative financing success. As co-founder of Real Estate Investing Masters, Wayne is a respected real estate investing coach and mentor, dedicated to helping Canadian investors confidently scale their portfolios. He is also the host of The Real Estate Investing Morning Show, Canada’s #1 daily podcast for real estate investing education.
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