Houston, TX · Member since 2015 · 304 posts · 47 votes
It seems a lot of the wholesaler I run into do not allow inspection contingency. Even major wholesalers like New Western and Networth.
Do many experienced investor put wholesaled homes on contract without having a home inspector look through it? Is a contractor really sufficient? I thought home inspectors can see more into the repairs and find out if there are structural issues, etc.
Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes
7y
I usually would not enter a contract without an inspection contingency. I did one last year, but the place was super clean and I was allowed to poke around long enough.
I generally do not use inspectors but I'll bring a contractor along if I need a second set of eyes. Many inspectors that I have met from residential sales impress me, with their diligence. I've learned from them.
I suggest that anyone who is a novice, always use an inspector. Try to get someone who isn't superficial. If you are going to rehab a property, you don't need someone to test the old oven. Or the windows that you are going to replace.
Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes
7y
I usually would not enter a contract without an inspection contingency. I did one last year, but the place was super clean and I was allowed to poke around long enough.
I generally do not use inspectors but I'll bring a contractor along if I need a second set of eyes. Many inspectors that I have met from residential sales impress me, with their diligence. I've learned from them.
I suggest that anyone who is a novice, always use an inspector. Try to get someone who isn't superficial. If you are going to rehab a property, you don't need someone to test the old oven. Or the windows that you are going to replace.
Houston, TX · Member since 2015 · 304 posts · 47 votes
7y
Thank you for your input Brian. What about possible foundation issues - Isn’t it usually inspectors that can get a more accurate evaluation of that and other big ticket items? I guess with thermal imaging, infrared, etc.
I guess what I’m saying is wouldn’t that be a big concern in case there are issues with the foundation and it seems inspectors are more qualified than contractors to check these issues?
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
7y
Wholesalers typically don’t have time to give you an inspection contingency, have you cancel in 5-7 days, and then try and go find another buyer. If you want to buy from a wholesaler you either inspect yourself or bring whoever you want Before you sign a contract.
Specialist · Baltimore, MD · Member since 2016 · 384 posts · 318 votes
7y
I second what @Wayne Brooks said about wholesalers and inspection contingencies. But to touch on the inspector issue in a broader sense, I generally don't use them. When you are starting out, they can be a great guide so you can hone in on common trouble areas for homes but inspectors are NOT subject matter experts...not by a long shot. Structural issues? They may say something like "This doesn't look right to me, but I'm not a structural engineer. You should have a professional look at it." Same goes for potential electrical, plumbing, slope issues in the yards and HVAC issues. They can tell you the boiler is old and the really good ones can tell you if the boilers made by that company, that year are generally good or faulty, but honestly, I've found very little value in that. Basically, if I need to have a specialist look at all these things that look questionable, why am I paying you to point at things I can see myself?
The biggest problems come from behind the drywall, things no one can see in an inspection anyway. So, hire an inspector the first 2-3 times, 5 times maybe, but after that, save your $300-$600 for the repairs and deferred maintenance you'll need to catch up on after you buy the place.
I second what @Wayne Brooks said about wholesalers and inspection contingencies. But to touch on the inspector issue in a broader sense, I generally don't use them. When you are starting out, they can be a great guide so you can hone in on common trouble areas for homes but inspectors are NOT subject matter experts...not by a long shot. Structural issues? They may say something like "This doesn't look right to me, but I'm not a structural engineer. You should have a professional look at it." Same goes for potential electrical, plumbing, slope issues in the yards and HVAC issues. They can tell you the boiler is old and the really good ones can tell you if the boilers made by that company, that year are generally good or faulty, but honestly, I've found very little value in that. Basically, if I need to have a specialist look at all these things that look questionable, why am I paying you to point at things I can see myself?
The biggest problems come from behind the drywall, things no one can see in an inspection anyway. So, hire an inspector the first 2-3 times, 5 times maybe, but after that, save your $300-$600 for the repairs and deferred maintenance you'll need to catch up on after you buy the place.
Thank you Russell. What about the thermal imaging or infrared devices they use? Are those no good either for seeing through the walls?
Specialist · Baltimore, MD · Member since 2016 · 384 posts · 318 votes
7y
@Ben M., not all of them use those things. And even if they do, all they will tell you is you should have a specialist look at it since they are not licensed. So you can just buy your own thermal imaging or infrared device for a one-time cost and save yourself the repeat expense of a guy/gal who will just tell you to have a specialist look at anything that looks suspicious.
There’s an attachment from flir (one of the pioneers) that’s plus right in to your cell phone if your looking for something basic. I don’t use inspectors here in Vegas as everything is relatively new with tile roofs, stucco siding and slab foundations. But the inspections I’ve had done in the Midwest almost never point out a real pro-blemish, if it isn’t “known good” like a fireplace, water staining, or aged roof it will just say “you should have a pro look at this, it doesn’t look brand new...” they never brought thermal gear.
@Ben M., I don't use them on my flips because I target very distressed properties I'll be tearing them apart anyway so no point.
You can hire an inspector who uses that stuff for your first purchase, and follow him around the house and ask questions to learn. Or, get on YouTube and you can get a 15 minute class on how to use them. Combine that with a little practice and you'll be as good, if not better than an inspector.