Have general contractors walk through property?

[Nestaly Nin]

Hey team, I'm in the process of buying a two unit property in Amsterdam, NY. The intention is to buy and hold and this is my first purchase. For future reference, I'd like to know if it's normal or appropriate to have one or two GCs walk through the property for the first time before submitting an initial offer. I figured I could get a list of major repairs and general estimates as to save time afterwards? Thoughts, comments or suggestions? Any response is greatly appreciated.

[Michael Hayworth]

How many properties have you purchased? What's your track record, and what's the incentive for a GC to come out on a house you haven't even made an offer on?

I don't know your market, but in most areas of the country, good GCs are very, very busy. My company actually stopped doing work for investors (other than my own houses, of course) because margins are lower and we used to field calls from dozens of newer investors who wanted us to come look at houses that they didn't even have under contract. Many investors are not very respectful of a good GC's time, so they end up stuck with weaker GCs who are desperate for business.

When I did do investor work, we'd come out if you had the house under contract and were in your option period, but we wouldn't go out in a pre-offer visit. There's no guarantee you'll even make an offer or if you did, that it would be accepted. My time is too limited and too valuable to do a bunch of visits on houses you don't even have under

Even when they did have it under contract, I often had to spend time educating a newer investor that the wholesaler he bought the house from was, hmmm, overly generous with his ARV estimate and overly stingy with his renovation cost estimate. It's really frickin' depressing to go to multiple houses with multiple investors who think they're going to clear $50,000 on a flip, only to have to tell them that, no, we can't cram $60K of reno into a $35K budget (and, BTW, those comps "within a mile" are for a neighborhood across a major intersection with very different characteristics, so your ARV is probably $20K lower than you thought).

Of course, all this is different if we'd done a house or two together and I know you're credible and not wasting my time. If you're new and haven't bought any houses yet, best thing you can do is get recommendations from other investors for a good GC, or meet one at REI meetings, and let him know you need some help, but that you're credible and do plan to buy homes that will need renovating.

Good luck!