Real Estate Investors are always looking for the best deals on property search engines like Craigslist, Zillow, Trulia, Realtor.com and Loopnet. Investors often see investment properties listed for sale in “as-is” condition. “As-is” is not the same as “sight unseen” or “no property inspections”. It seemly means that the owner or seller does not plan to make any improvements to the property prior to sale or in some cases negotiations. You can buy property in “as-is” condition but you certainly must do your due diligence with a Home Inspection.
What is a Home Inspection?
Home inspections are one of the most popular and through ways to examine a real estate investment property. There are several people, who should also be part of your real estate investing team, who may inspect a home prior to putting in an offer or closing a deal:
- Professional Home Inspectors
- Contractors or Trusted Handymen
- You, the prospective buyer
Real estate investors will 100% benefit from a home inspection because they will have a better idea of what type of investment they are getting into and what property issues that need to be addresses before they spend their real estate investing funds.
Professional Home Inspectors
When looking to buy residential investment property professional home inspections are most commonly used for property inspections. The company or inspector that you hire will arrive at your potential purchase with the following:
- ladders, flashlights, electrical testing equipment
- pressure gauges, laser beams, thermometers, and more other tools
They will use various tools and other resources to evaluate your real estate investment property. They take a look at everything, from the foundation to the roofing material. An average through home inspection can take about 3 -4 hours and will cost real estate investors between $250-750 nationwide. Of course cost and time is determined by the size and condition of the investment.
Once he makes sure the foundation is level, AC system works and the roof is not about to fall in, they will produce a “home inspection report”. It will contain information about how your prospective purchase held up against tests and standards. It will also list any issues or potential issues with the property.
Experienced investors or rental property owners often have a relationship with a few trusted contractors or handymen who they have worked with in the past. They are usually very good at what they do, offer are a wealth of information and a great resource for when you need an inspection conducted on a potential investment property.
A Contractor will look at your potential investment differently then a home inspector. He will not be as detailed but he will have a great idea of what is wrong and can attach a dollar amount to needed repairs and/or improvements.
Lastly, a contractor may or may be less expensive then a professional home inspector. Contractors sometime treat it as an estimate for a potential future job and or charge a flat rate of $250 or so for coming out. You will not get a fancy report but rather a “property condition report” or “estimate” of what is wrong and projected cost to repair should you decide to purchase this potential investment property.
You, The Prospective Buyer
If you are experienced investor, rehabber or real estate contractor – then you are more than capable of doing your own walk-thru of your potential buy. If you are a new investor, it is suggested that you show-up during the home-inspector's appointment or the contractor's property evaluation so you can observe and learn what is conducted during a home inspection and pick up a few tricks of the trade per se. As you become more experienced or say specialize in wholesaling then you will have your own set of tools and resources that will equip you to make real estate offers on “as-is” condition type of real estate investing deals.
Real Estate Investing deals can be found in property listed in “as-in” condition. It is up to you to perform some type of home inspection PRIOR to you actually buying the property. That could be before you make an offer or after you've made an offer to buy an investment property – but ALWAYS before you PURCHASE. A home inspection will help you lock down your real estate investing profits by knowing how much to offer, how much to spend and best exit strategy for your potential real estate investment purchase.
Good Luck Investing!