Anyone ever pre-inspect?

[jamies]

First of all you have to look at who the buyer and seller are. Buyers at auction on the TV shows often buy sight unseen and end up with what you might expect - makes for good TV but not so good on the profit line.

As a professional investor I can walk through 90% of properties in 10 minutes and tell you the name of the carpenter who built it. Well OK, maybe not quite that good. But I have 40 years of construction experience. And even then I always bring my partner through as a second set of eyes, because even I can get tunnel vision and miss things.

I love the call I once made to my partner on a mobile. "Well, the bad news is there's a hole in the roof, but the good news is the water drains out the hole in the floor..." True story. If you can imagine we were STILL outbid on that piece of junk by some fool.

If I have questions I will usually bring in a contractor for that specialty rather than an "inspector." I AM an inspector - I have the infrared scanners, wall cams, moisture meters, and all the goodies. But I am NOT a roofer, for example. And while I've poured many foundations I am not an foundation "expert" so if there is a question I bring in a pro.

However, a non-professional should have a qualified home inspector check everything out. And they should have more than a flashlight.

The thing is often you only get about 10 minutes to judge if you want to make an offer or not. Basically my interest is the location, is the roof falling in or the floor falling out, and what life cycle is the neighborhood in. Anything else I can fix if the price is right.

These days you ONLY want to buy location, location, location, and you want to buy either in areas poised for new construction during the next expansion cycle, which may not be for 10-15 years or in areas of gentrified renewal (i.e. certain center city areas).

This is a tricky time to buy, even at a good price so you must buy the right place at the right price or keep your money in your pocket until you can. Always buy with an eye toward selling. People don't want to live next to the freeway or in a swamp - in the boom such places would sell, not now and not in the future.

Walk through, make an offer, if accepted, get inspected, ask for concessions, if you can't get enough, walk away.

[StealthRabbit]

Originally Posted by sponger42

...
The property is over 100 years old with a leaky fieldstone basement ... at least one "temporary" support installed under a floor joist about mid-span, and very frayed old wiring left in place alongside newly installed lines. The house has been expanded at least once, ... the basement it's quite a kludge. There's also (identified) issues with the water and sewer lines and neighboring properties...

Good reason to spend 'Enough' on inspection / quotation to know what you are up against (worse Case)/ For this I would actually use a contractor, as inspectors are not well versed in estimating repair costs, and often can pick a 100 yr old property apart so bad, you lose all hope / reality (it will never be perfect).

Originally Posted by chet everett

As others have said, if you are semi-serious about understanding what sorts of problems an older house might be subject to you really ought to have relationship(s) with contractors already. If you have worked with carpenters/ framers and plumbers and electricians ..."from what I see here you are looking at least $8,000 to just address the code issues, if you want to actually upgrade things and make this into what I would consider acceptable for my own home you need to budget closer to $12,000".

... buy 'em lunch ...

As usual, Chet knows the issues and offers good advice. Considering your aged product with stone foundation and signs of 'heaving' / moisture I would take heed to a $12k scenario. (but consider $20k for adding sewer / water / infrastructure improvements). rewiring an older house can be considerably more than new work. (~$10k for a new house),

Get it right, never buy property on emotions.

[TechGromit]

Your Pre-inspection is when you walking though the house for the first time. If you know what to look for you can see if there are any potential problems before you put in an offer. Look for scratches in the floor and cigarette burn holes in the vinyl and linoleum floor. Damage to the counter tops. Carefully smell the air, does it smell like someone has been smoking in the house, are the strong scents in the air, if so the seller may be trying to cover up the smoking smell. Smell the vents air, smell musty? cigarette smoke? Any cracked titles in the bathroom? Damage to the tub? Condition of the caulking around the tub? hows the drainage outside the house? Does the ground sllop away from the foundation? Are the gutters full of leaves? There a lot you could do by a visual inspection during a walk though of the house without crawling around in the attic like a housing inspector.

[sponger42]

Thanks for all the additional advice. I'm waiting to hear from the listing agent about inspecting first, but they're being balky. Makes me suspicious that I'm going to find serious problems on this abandoned REO.

This is a pretty insular community and I don't have the contractor connections I need for the rehab, as mentioned, so I'm seriously considering taking my money and walking on this one and the whole area actually. I don't think I'm going to find a better deal, and I'm not even sure this one is worth it. The market here is in a deep-freeze and if Europe's economy tanks and drags the rest of the world down with it I can expect at least another year of flat property values and low interest rates. Plenty of time to build up capital to invest in a more promising market.

[chet everett]

If you were looking for a place to live instead of an investment opportunity the motivation to get a place would be very different. I tend to agree that the general economic trends are unlikely to switch around anytime soon. The odds of severe downside still outweigh any potential to make gains w/o some BIG risks...

Originally Posted by sponger42

Thanks for all the additional advice. I'm waiting to hear from the listing agent about inspecting first, but they're being balky. Makes me suspicious that I'm going to find serious problems on this abandoned REO.

This is a pretty insular community and I don't have the contractor connections I need for the rehab, as mentioned, so I'm seriously considering taking my money and walking on this one and the whole area actually. I don't think I'm going to find a better deal, and I'm not even sure this one is worth it. The market here is in a deep-freeze and if Europe's economy tanks and drags the rest of the world down with it I can expect at least another year of flat property values and low interest rates. Plenty of time to build up capital to invest in a more promising market.

[StealthRabbit]

Sellers are always reluctant to offer inspection, especially on older / ancient props.

As I mentioned, a home inspector that is trying to be diligent and protect your interests is gonna find a laundry list of issues.

RE: market future... buy wise, this is gonna be at least a 10 yr cycle, AND some places will NEVER come back. (McMansions in over developed and under desired locations). For investment, YOU MUST buy something that appeals to tomorrow's buyers. They are gonna be a lot more discerning than yesterday's buyers. Folks are not gonna be keen on getting STUCK (again).

RE: interest rates... THAT is a real challenge to discern. Something has to pop, outside investment in USA is at risk, tho USA is still the safest bet on international investing front (now that is scary..., in more ways than one). I can't imagine the US banks are not rolling in the dough (since they sold a lot of their bad debt to Europe). Germany should be getting plenty mad... I would grab a rate soon, but only on something you can sit on for awhile. (Thus I would buy your 'future' LT residence as second home NOW, and use the equity to speculate on rolling primary residences that are VERY attractive to active seniors. (small, low tax, ez maint, near colleges, airports, bus lines, medical, outdoorsy activities, culture, animal friendly, mild climates...) I WOULD NOT buy a spec house in most places in MI, NY, IN, PA, IL, OH ... YMMV

that said... I'm an advocate for senior housing and would look specifically to multi-family, ground level investments. Homes with extra living qtrs are good, but not nearly the security of cash flow as MF.