What is the risk of hidden physical defects?

7 Replies

It seems easier for a professional inspector to find the problems with an apartment building than a mechanic inspecting a car, since so many vehicle systems are sealed. At the same time, there is some risk of missing issues in roofs, HVAC, plumbing, electrical, even appliances, etc. 

Are there any experienced investors out there who can help quantify these risks and/or point out what one might focus on? How big of an issue is this? I have a decent amount of experience in construction, but not enough to answer this to my satisfaction.

Thanks!

hmmm. Well first the only right answer is nothing and everything. If you buy it at a deep enough discount and you have to replace everything then you have no risk if you buy it at fair market value then everything is a risk if you miss it. With that said. The costly items like a roof or house systems are actually pretty easy to spot if you know what to look for. In the attic if you see discoloration on the underside of the roof it may have a leak. If it raining and nothings coming in your ok. If you smell a damp musty smell there is a moisture issue. Not always alarming but something to remedy. Check the date on the furnace see to see the age. Open the front panel and check filter to see how it's maintained.  

The biggest thing I've ran into was a serious roach infestation. Along with mice termites and bed bugs. Those can be killers because you might think it's ok and overpay. Check the kitchen cabinets. Inside ,above , below !!!

@Seth C.   I guess I'm having a hard time understanding the question. Are you looking to forego a home inspection and do it yourself? Are you asking if there are things to look for when viewing a house, that can help you decide if you want to make an offer on the property?

What @Bryan Williamson said about everything and nothing is correct. The risk of hidden defects is everything. You could have structural damage hidden somewhere that could cause the property to be uninhabitable. 

Can you rephrase the question or give more information? Thanks!

I would never consider foregoing inspection. At the same time, I would never consider relying on inspection alone.

I guess my question is twofold. First, how often do major issues slip past professional inspectors? Second, what should I do to minimize this risk? Roaches for example seem like a significant issue, since they do not cause visible damage but can be expensive to disinfect. The money-pit cliche is one of the greater issues causing me unease at the moment.

I don't do inspections all that often because I buy a lot of foreclosures and auction properties as-is but I've certainly had plenty of surprises after purchase. Generally I'd categorize them three ways.

First is things that are hidden that neither an inspector or I could not see. Recent example where I had an inspector was the field lines for a septic system were clogged. Until a tenant got in there and really started using the plumbing we didn't know about it. $2700 later... Not realy a whole lot you can about this I don't think. Just know you'll get some surprises occasionally.

The second thing I would say is time based things where the problem wasn't occurring when I or the inspector was there. Examples of this that have happened to me is flooding during heavy rains, the neighbors have vicious annoying dogs that weren't out and a couple neighbors hanging out in their yard selling drugs. This one you can avoid by visiting the property a lot under different conditions/times if you have the time and inclination.

The third is just me being sloppy and overlooking things because I was in a hurry and didn't do enough due diligence. Avoid this with checklists and discipline.

Seth

Your approach to having inspections done but not relying on the inspection alone is wise and will go a long ways to minimize risk.As far hidden structural defects there are several simple and easy things you can do yourself to identify possible symptoms of structural problems that may need correction.

  • Roof and floors; look for any obvious sagging.Sometimes you can feel a floor slope just by walking on it.Also as you are walking on a floor, be aware of any excessive movement. I was looking a two story SFR that as I walked across the floor you could actually see water sloshing in a fish aquarium.Also listen for floor squeaks. The fix on this particular house was not too bad.The nailing of the floor sheathing had not been done properly and needed to be redone.The big cost was in the removal and replacement of the carpets and floor tiles.
  • Ceilings;look for cracks and excessive deflections. Cracks in the middle of rooms can be an issue
  • Walls; look for cracking in the walls.Small hairline cracks a common and normally not a problem.Also small cracks above window and door openings are common.Larger cracks may be a sign of foundation movement or improper construction of the wall framing.
  • Foundations; walk around the building to observe any apparent foundation movements.While not major problem in the area, this can be an expensive fix.Thousands of dollars.
  • Others; doors and window not opening and closing properly.Several things may be the cause of this including foundation settlement and framing problems. Check for displacement cracking in the walls around the openings.

Finding the cause of a structural defect is kind of like going to a doctor because you have pain.You know something is wrong but you do not know what the cause is. That is where the doctor and testing hopefully can pin point the cause.In the case of a building, a structural engineer may be able to help you out if you or your inspector suspect that there may be a structural defect.I would suggest that you have an experienced investor friendly structural engineer on your team to help you diagnose possible structural defects that you may suspect.

This may sound like a lot but from my experience, most single and multi-family residences do not exhibit symptoms of structural distress.If you do find a property that you are interested in and it appears to have some hidden defects, this may be a great opportunity to negotiate a good deal.

@Gary Landon :

Exactly the type of response I was looking for. Much appreciated.

Rodents damaging we can't neglect, they will make the walls hollow and take a nap there and feel free to walk all over the house wall. This type of structural damage a serious problem. Rodents are also responsible for transmit deadly diseases, which will make a life-long effect on a complete family's health.

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