Pending an inspection, I think I just bought a rental property here in Greenville! Wahoo! It is a bank foreclosure that was sold as is. I am trying to be unemotional because I trust the numbers I used, but this is only my second all-time purchase so - I must admit - I've got a few nerves. : )
In that 10-day inspection period, what are the things you guys would check in order to make 100% sure you want to go through with the purchase?
A few things I am planning on so far.
1) Get the inspection.
2) Turn the water on to the house and look for leaks.
3) Camera the main sewer line (to look for breakages or root intrusions).
What else could I be doing?
Thanks for your insights!
Talk to experienced landlord in area to verify rent rate and perception tenants have of neighborhood. You can email me.
1. Structural - roof rafters; floor joists; foundation walls.
2. Electrical - updated service panel; updated wiring.
3. Plumbing - serviceable water & sewer lines that are not leaking and are accessible.
4. Insulation - walls, attic, basement/crawlspace are properly insulated
5. Heating/cooling - furnace & ac work properly
6. Windows - functional
7. Roof - serviceable without leaks
Those are the major things I want to see. Most other things are cosmetic, easily replaced or easily visible with the naked eye. FWIW, I know most everything the inspector knows, but it helps to have a disinterested party viewing a property to avoid internal "groupthink" because you want a property so bad.
Congrats on pursuing your second property. If you can, check everything. A professional inspector will not know the property as well as you can if you take on the effort. Often times it is the accumulation of smaller problems that turns a good deal into a bad one. I would check the interior of the house, of course, plus crawl space if you have, and attic.
Is crawlspace a swamp? Does it have liner? How old is the duct work? Ho old is electr. wiring? What is sewer line material, what is water line material? How leaky is crawl space to house? What manufacturer is electr. panel? If it is Federal Pacific, plan on replacing it. Are outlets grounded? Cracks in walls/ceiling that might indicate foundation issues? Do ceilings have water stains indicating possible roof leaks? Do all drains work well? Are all drains vented? Is there any insulation in the attic? Does roof sheathing look solid? Is sheathing moldy? Are bathroom fans vented to the outside or into crawl space?
Also, have the inspector come out quickly so you can react to report and get repair estimate. Most inspector point out problems and refer to you to consult a licensed professional of that field. Try to get preliminary repair idea from inspector. Some do, others don't.
Best advice I can give you is make sure that YOU ARE THERE during the inspection. The inspector should explain the different items that he is finding wrong with the house. He will also tell you if it is a big deal or not. Note: If he doesn't work with you like this, find a different inspector next time since you are paying for his time.
Don't let the final report he sends you scare you. It will be around 60 pages and will tell you every defect he found in the house. Most are minor and don't amount to anything but now it's time for renegotiation! Go back to the bank and give them a copy of the inspection. Here's what it's going to cost to repair x. I normally will not add the items that you can easily see, paint, carpet, etc. But I do add in the termite repairs, electrical issues, plumbing problems, etc. Remember the bank wants to get rid of that property more than you want to buy it. The feds look into their books all the time and they don't like to see REOs on the books. The feds will actually make the bank hold an additional amount of money in an account equal to or more than the amount of the original loan. That means they hold twice the amount in a dead asset. One last thought, you are approaching the end of a quarter and the bank would love to get that property off the books before then if you can close by month end. Year end is even a better time to negotiate with banks. Good luck!
^^ This is spot on advice. Anything that is not obvious that is uncovered during an inspection I bring back to the seller. I assume that the hidden areas are in good shape, and if my inspection tells me otherwise I expect to be compensated (or, as I have done before, just walk away from the deal) for addressing those issues. If the seller is unwilling, unless I am already stealing the place, they can sell it to the next sap.
PS: One thing I forgot to mention: DO NOT soft pedal issues that come up in an inspection (don't overblow cosmetics, either) because you've already become emotionally invested in a property. These things are commodities and there will be a house right around the corner if this one does not work out. It is real easy, especially after you've spent money on an inspector, trips to view property, etc, to downplay the amount of time, money and difficulty involved in repairing/replacing some items; never let the psychology of prior investment prevent you from making the best financial move for yourself. Sometimes that means you go down the road to the next property, and you end up having some sunk costs on the one you didn't buy.