Is it worth getting inspection on 6-unit property?

Question

Hi,

I would like to know if it’s worth to get the inspection done for a 6 unit property which would cost about 2500$?

Could you please provide your input

thanks!

Alecia Loveless · Answer

@Sandy Sandy I always recommend inspections. I had a property under contract for $300,000. After the inspection we brought in a high priced contractor to give a bid on everything to negotiate with and got the price lowered by $100,000.

Another building I had under contract and they had encapsulated the foundation all the way up to the ceiling. When we made it outside and then upstairs the inspector realized they covered the walls and foundation to try to hide the fact that the whole building was bowing out from the foundation and if it wasn’t jacked up and having some sort of huge engineering repair the walls were going to eventually implode. We got out of that contract.

I also always have an independent septic inspector come inspect all septic systems on deals I might be buying. This is usually about $700. But you learn tons about the septic system and how it is doing and how much longer it might last.

I think the inspection I did about 8 months ago with 8 units with tenants was about $1500.

Russell Brazil · Answer

Id say this depends on your experience level. I never do inspections, but I also know more about properties than the average home inspector.

Devin Dougherty · Answer

In my opinion, inspections are a peace of mind kind of thing. That $2500 inspection cost could also possibly save you from a lot more costs down the road. Say you skip inspection, then the plumbing, foundation, or whatever needs replaced after you close. Those are expensive fixes that you could have tried to get the seller to fix or gave enough reason to find another deal to not worry about those big expenses.

Dan H. · Answer

I had an inspector once find issues that resulted in $47k price reduction.  The inspector is on my short list of forever team members.

If you had years of experience (which I have) and did not want 2nd set of eyes you could skip the inspection but I do not desire a job as an inspector. The last time I used my inspector he asked me why I was having him inspect the property (it was in far better shape than what I usually purchase). I told him it was because I did not want a job as an inspector. I already do a lot of jobs I do not desire because doing so is more convenient than hiring someone. I do not need to add to the list.

Inspection provides peace of mind, opportunity to negotiate reduced price (I have negotiated many 10a of thousands off due to my inspectors thoroughness), a punch list for the maintenance or rehab team.

Good luck

John Mocker · Answer

Sandy,

From an Insurance standpoint, if you have an inspection, have them check the wiring.  Even inactive Knob & Tube or Aluminum wiring can be problem in getting Insurance.  Also, see if they can give approx. ages for the Roof, Plumbing, Electrical and Heating systems.  Many companies are looking for that.  Watch for Asbestos Siding.  That ended up being a problem for many Insurance companies.

I had an inspection done when I purchased my home.  The inspector found that the Roof, that looked great from the ground, was extremely brittle.  It had prematurely aged.  We were able to get a $5000 reduction based on the roof condition.

Bhavya P. · Answer

Thanks for your responses! update: c of o has been recently renewed , will the inspection done as part of c of o good to go ?

Jaryn Pierson · Answer

Just want to add one little piece that doesn't look like it has been shared yet. First off, inspection never feels like money poorly spent, regardless of skill level or experience.  Secondly, its hard to form a relationship with an inspector until you actually use said inspector. Because I've used my inspector a few times I can call him anytime and ask him a few questions about different properties here and there and he's always happy to provide some insight.  Lastly, it's always nice to have an inspection in hand at closing as it gives you a great to do list to get working on right away.

Michael Smythe · Answer

Unless you know exactly what you are doing, get the inspection!

Bob S. · Answer

What did your GC say? I have never hired an inspection co on any of my 500 or so deals. YOUR team should tell you yes or know and what is needed. If not do not buy it

Gino Barbaro · Answer

@Sandy Sandy

Always worth it. It's an insurance policy for things you may miss and possibly to use if there is deferred maintenance or some larger issues. It will also give you the ability to create a budget for your property.

I would always try to get three quotes, and referrals from property management companies and brokers

Congrats!

Gino

Is it worth getting inspection on 6-unit property?

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