Hi. We've been looking to invest in a SFH and making it a rental. We found a foreclosure at the 90k price point, which is good in our area (NY). To our surprise, the house looks pretty good inside. It's not too bad on the outside either. Problem is its winterized and no electric service. So we can't check out the utilities. I know our options, but I think we might forge ahead without an inspection. Is this a huge no-no? Have others taken this risk and it paid off?
The house is in a desirable area and I feel really good about the asking price vs it's market value. But Is it just too good to be true? Is the bank hiding something? What's lurking behind those walls?? Anything I should do or look for in particular?? I feel like I need to be a detective. Thanks!
You can skip the electrical portion of an inspection, but have the foundation, roof and other systems checked over by an inspector. The roof and foundation repairs are pretty darn expensive. I would calculate a complete new electrical system in the numbers, just to build in a financial cushion. A panel alone is above $1000, and does not include an entire rewire.
That said, I have bought without an inspection...but lived in a place where there was no soil movement, no water damage, and instead we got stuck with termites. It turned out well in teh end, but I do not recommend it unless you have deep pockets.
thanks! The more I read, I think I may ask the bank to dewinterize and do an inspection. It's just too scary to not Inspect.
I wouldn't do it. Winterizing primarily covers the plumbing fixtures to keep toilets from freezing, water lines from bursting, etc. when the heat is turned off. Without turning on utilities, you don't have any way of checking the integrity of the water system. If you do go ahead, factor in replacement plumbing & electrical systems in case of total failure.
In general, I would advise you to do your best due diligence possible. Do you plan on renovating the property after you purchase it? Do you know a trusted contractor? What year was the house built?
If you plan on doing some renovations & you know who the contractor will be, then more often than not they won't mind walking through the property & checking your electrical, & giving you an assessment on the plumbing, roof, siding, & structural items. Paying for a formal inspection may be worth it, especially if you don't have a strong construction background. But a trusted contractor should have no problem giving a heads up of 98% of everything that is wrong or could be wrong with the house.
I've bought hundreds of homes without an inspection- but that's just because I can quickly walk through a house and know what to look for & understand what I'm getting into. Another key is factoring in a contingency rehab amount when your making your purchase decision.