{"id":105177,"date":"2020-05-10T15:00:30","date_gmt":"2020-05-10T21:00:30","guid":{"rendered":"https:\/\/www.biggerpockets.com\/renewsblog\/?p=105177"},"modified":"2021-03-16T14:51:51","modified_gmt":"2021-03-16T20:51:51","slug":"pre-inspection-red-flags","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/pre-inspection-red-flags","title":{"rendered":"3 Pre-Inspection Red Flags That Make Me Run From a Deal"},"content":{"rendered":"<p>One of the biggest mistakes I\u2019ve made in the past was buying properties without setting eyes on them. I think it\u2019s very important that you do a <a href=\"https:\/\/www.biggerpockets.com\/blog\/due-diligence-ultimate-guide\/\" target=\"_blank\" rel=\"noopener noreferrer\">pre-purchase walkthrough<\/a>. If you have a trusted contractor or even a project manager and you\u2019re doing multiple deals, you should also bring them along to view the property with you.<\/p>\n<p>Before scouting it out, you should have a scope of work checklist so you know what you&#8217;re getting yourself into before you buy the property.<\/p>\n<p>I get it\u2014there are some auction sites that don\u2019t necessarily allow you to enter the property before you buy it\u2014and that\u2019s a big gamble, in my opinion. I\u2019ve bought those properties, and those are the ones that cost me a lot of money because I wasn\u2019t able to see what was going on in the basement.<\/p>\n<p>The basement is going to lead me to my first point, and that\u2019s the foundation&#8230;<\/p>\n<p><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/MR2nVXaN3K4\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<h2>3 Pre-Inspection Red Flags That Make Me Run From a Deal<\/h2>\n<ol>\n<li>\n<h3>Damaged Foundation<\/h3>\n<\/li>\n<\/ol>\n<p>Before you purchase, you need to make sure that the foundation is stable and that there aren\u2019t any cracks. Look, I\u2019m not a full-blown construction expert, but I\u2019m smart enough to keep smarter people around me to do the things that I can\u2019t do or don\u2019t want to do.<\/p>\n<p>Once again, a trusted contractor can go with you to that property walkthrough before you buy to make sure the foundation is good. Foundations are very expensive, and I\u2019m not sure that once a foundation is repaired it will ever be the same.<\/p>\n<p>A damaged foundation also likely indicates that something is going on with the ground surrounding the house. So, who knows the full scope of the issues.<\/p>\n<p>The only way I think you could purchase a property with foundation issues is if you completely redo the entire foundation. This is something that I would leave to more experienced investors and investors who have no other choice but to buy properties with foundation issues.<\/p>\n<p>A lot of you who are investors on the East and West coasts can\u2019t really <a href=\"https:\/\/www.biggerpockets.com\/real-estate-listings\" target=\"_blank\" rel=\"noopener noreferrer\">pick your deals<\/a> anymore. But we in the Midwest still feel like kids in a candy store. If a property has foundation issues, we don\u2019t even take another look at it. It\u2019s a risky business.<\/p>\n<p><em><strong>Related: <\/strong><\/em><a href=\"https:\/\/www.biggerpockets.com\/blog\/scaling-real-estate\" target=\"_blank\" rel=\"noopener noreferrer\"><em>The Investor\u2019s Mini-Guide to Scaling Up to a Real Estate Empire<\/em><\/a><\/p>\n<ol start=\"2\">\n<li>\n<h3>Major Plumbing and Electrical Issues<\/h3>\n<\/li>\n<\/ol>\n<p>The next thing that&#8217;s a red flag are major plumbing and electrical issues. I say that because these items tend to be expensive, and it\u2019s not easy finding good plumbers and electricians. They all kind of live in a world of wizardry, where everyone perceives a certain job or issue the way they want to perceive it. So it\u2019s tough to find good folks who are going to do the right thing.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-108283\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/03\/rental-gone-wrong.jpg\" alt=\"Sad businessman leaning on glass\" width=\"702\" height=\"336\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/03\/rental-gone-wrong.jpg 702w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/03\/rental-gone-wrong-300x144.jpg 300w\" sizes=\"auto, (max-width: 702px) 100vw, 702px\" \/><\/p>\n<p>On top of that, you\u2019re going to have to go through the ringer with the city. You\u2019re going to have to pull various permits, and you\u2019ll have to get licensed electricians and plumbers. Once the work is done, you\u2019ll have to get the city to inspect and approve it. Thousands of dollars later, hopefully the property will be certified by the city and you can move on.<\/p>\n<p>Look, if I\u2019m buying a property, I prefer it not to have major electric or plumbing issues. I don\u2019t remember buying a property ever that didn\u2019t have some plumbing and electrical work. But a full-blown re-plumb and rewiring of an entire house along with installing a new panel and external power is not something I want to get myself into.<\/p>\n<p>Once again, I\u2019m not the most sophisticated construction guy out there. I did work as a laborer for four years, but it\u2019s not my bread and butter. Long story short, if it has major electrical or plumbing issues, forget about it. I don\u2019t even want to touch it.<\/p>\n<p><em><strong>Related: <\/strong><\/em><a href=\"https:\/\/www.biggerpockets.com\/blog\/how-to-rent-property-to-the-right-tenants-fast\" target=\"_blank\" rel=\"noopener noreferrer\"><em>How to Rent Your Property to the Right Tenants\u2014Fast<\/em><\/a><\/p>\n<ol start=\"3\">\n<li>\n<h3>Roof That Requires Complete Teardown<\/h3>\n<\/li>\n<\/ol>\n<p>Last but not least is the roof. Roofs are pretty straightforward and simple, but they tend to cost quite a bit of money. Personally, I like to buy a property that will have at least a 10-year life left on it. I just don\u2019t want to touch properties where I need to completely tear off and re-shingle the roof.<\/p>\n<p>Now, there is nothing wrong with any piece of real estate as long as the price is right. So if the property does need a new roof but the foundation is great, the electrical and plumbing are good, and the interior is not too bad, then you have to get a discount on that price based on what the roof will cost.<\/p>\n<p>Ultimately, you\u2019re buying a problem and you\u2019re selling a solution. That is the name of the game. However, you don\u2019t want to buy too big of a problem.<\/p>\n<h2>The Bottom Line<\/h2>\n<p>To recap, make sure you check out the foundation, plumbing and electrical, and the roof. I strongly encourage beginning investors to not buy a property that has any of these three repair items as larger issues. I prefer for you do a cosmetic rehab and make money when you buy, not when you sell. So make sure that you negotiate hard and you buy cheap.<\/p>\n<p><a href=\"https:\/\/www.youtube.com\/biggerpockets\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-114268\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/6.jpg\" alt=\"ad-youtube-channel\" width=\"706\" height=\"125\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/6.jpg 706w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/6-300x53.jpg 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/6-702x125.jpg 702w\" sizes=\"auto, (max-width: 706px) 100vw, 706px\" \/><\/a><\/p>\n<p class=\"p1\"><em>I\u2019d love to hear from you. What do you look for in your pre-purchase inspection?\u00a0<\/em><\/p>\n<p class=\"p1\"><strong>Comment below.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>One of the biggest mistakes I\u2019ve made in the past was buying properties without setting eyes on them. I think it\u2019s very important that you do a pre-purchase walkthrough. And when you&#8217;re doing that walkthrough, watch out for these three deal-breakers.<\/p>\n","protected":false},"author":1672,"featured_media":119207,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4252],"tags":[],"class_list":["post-105177","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-deal-analysis"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/105177","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/1672"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=105177"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/105177\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/119207"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=105177"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=105177"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=105177"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}