Walking in to a prospective home for an investment purchase

Flipper/Rehabber · Peru - Kokomo, IN · Member since 2022 · 39 posts · 20 votes

Do you have a check list of things to look at, take pictures of or write down? Do you bring your contractor with you for the first look? Do you take measurements? We are looking for our next home to flip. We have a home scheduled to look at. The first home we flipped practically fell into our laps and it was easy to say yes. There wasn't much searching to find it and there was no question the numbers would work. I feel like if I walk into a property empty handed, I am doing something wrong. Please share your thoughts and thank you for your insight!!

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Austin Johnson

Investor · Jefferson City, MO · Member since 2020 · 192 posts · 178 votes

my method to the madness.

first: walk the outside and check foundation. walk it again, checking the siding, gutters, roofing if possible, drainage, etc.
take pictures of everything worrisome.
enter the house and go straight to the basement. again, foundation check, take photos of the area. any wet spots? cracks? unfished areas? closed off areas you cant see?

then go upstairs, look at finishes, flooring, etc. it's funny because the main level is the last thing I worry about.

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Austin Johnson
Investor · Jefferson City, MO · Member since 2020 · 192 posts · 178 votes
4y
my method to the madness.
first: walk the outside and check foundation. walk it again, checking the siding, gutters, roofing if possible, drainage, etc.
take pictures of everything worrisome.
enter the house and go straight to the basement. again, foundation check, take photos of the area. any wet spots? cracks? unfished areas? closed off areas you cant see?
then go upstairs, look at finishes, flooring, etc. it's funny because the main level is the last thing I worry about.
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Michael Dumler
Real Estate Agent · Atlanta, GA · Member since 2020 · 1k+ posts · 1k+ votes
4y
@Kellie Powell, I would advise that a checklist at the very least is needed. Take note of the condition of your major items such as roof, HVAC, furnace, and water heater. Taking videos and photos is a must. Do not expect your contractor to complete a walkthrough/provide a quote until the property is under contract within due diligence. I'm sure you're well aware, but that first flip of yours is rare. Flips don't come that easily, especially in this market. Hope this helps!
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Patricia Steiner
Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes
4y
A walk-through is not an inspection. The purpose of a walk-through is to simple gauge it's condition, location, and best use. The inspection period is when you cowboy up, bring in resources, and take a deep dive. That's when you have some skin in the game and have the right to look at components in detail. I do recommend that you build bench strength and find a investor focused realtor to go with you - maybe one who has represented other flippers in purchases. Let that realtor do some preliminary digging and inquiries with the listing agent that can help focus your attention during the walk-through. State Law also defines what can be done during an inspection. In my state, you can look but you can't alter. Know the business and know the law. An investor realtor can provide that...interview a few - not all are created equal and some just flat out don't have the experience they say they do. You're running a business so no winging it.

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Kellie Powell
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Flipper/Rehabber · Peru - Kokomo, IN · Member since 2022 · 39 posts · 20 votes
4y
Quote from @Michael Dumler:

@Kellie Powell, I would advise that a checklist at the very least is needed. Take note of the condition of your major items such as roof, HVAC, furnace, and water heater. Taking videos and photos is a must. Do not expect your contractor to complete a walkthrough/provide a quote until the property is under contract within due diligence. I'm sure you're well aware, but that first flip of yours is rare. Flips don't come that easily, especially in this market. Hope this helps!

So this might sound like a dumb questions, but how can I go under contract for a home I am purchasing to flip, If I don't have an estimate for repairs from a contractor? The 1st home we did, we did 90% of the repairs ourselves. It was our home away from home for a while. Husband is a very handy HVAC / Maintenance guy. I painted walls, cleaning and took care of the shopping, accounting and minor details in the house (like putting handles on new cabinets and learning to lay VPF). This next one, we would like to contact out more of the work. We know what our main contractor guy charges per hour, but how much time he thinks it will take to complete is a whole other questions. And if he would be available for such a big project. I've crunched numbers and I know how much I can spend to make it work, but how can I get to that number without a contractor walking through first? I feel like I'm missing something here.
Side note, yes, it was rare. and perfect timing! we were really appreciate the opportunity that was given to us. Knowing the right person at the right time was key to that project.
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Michael Dumler
Real Estate Agent · Atlanta, GA · Member since 2020 · 1k+ posts · 1k+ votes
4y
@Kellie Powell, as Patricia advised, walk the property with an investor-focused real estate agent that specializes in flips. Your contractor may be able to provide a soft quote based on videos and photos provided, but not don't rely on that as your final number. In the meantime, it's your responsibility to learn how to properly analyze repair costs and produce a scope of work. Honing in on this skill will save you time and help prepare your final offer when it comes time to submit. As mentioned, in the event you go under contract, your contractor can then consult and give you the run down.
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Mindy JensenPro Member
BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
4y
Quote from @Kellie Powell:

Quote from @Michael Dumler:

@Kellie Powell, I would advise that a checklist at the very least is needed. Take note of the condition of your major items such as roof, HVAC, furnace, and water heater. Taking videos and photos is a must. Do not expect your contractor to complete a walkthrough/provide a quote until the property is under contract within due diligence. I'm sure you're well aware, but that first flip of yours is rare. Flips don't come that easily, especially in this market. Hope this helps!

So this might sound like a dumb questions, but how can I go under contract for a home I am purchasing to flip, If I don't have an estimate for repairs from a contractor? The 1st home we did, we did 90% of the repairs ourselves. It was our home away from home for a while. Husband is a very handy HVAC / Maintenance guy. I painted walls, cleaning and took care of the shopping, accounting and minor details in the house (like putting handles on new cabinets and learning to lay VPF). This next one, we would like to contact out more of the work. We know what our main contractor guy charges per hour, but how much time he thinks it will take to complete is a whole other questions. And if he would be available for such a big project. I've crunched numbers and I know how much I can spend to make it work, but how can I get to that number without a contractor walking through first? I feel like I'm missing something here.
Side note, yes, it was rare. and perfect timing! we were really appreciate the opportunity that was given to us. Knowing the right person at the right time was key to that project.

This is when your homework, research and preparation come into play. WHAT needs to be rehabbed? You can ballpark your rehab costs close enough to make an offer, but you'll go broke - or make your contractor very upset - if you drag them around to every property you **might** buy. J Scott has a book called The Book on Estimating Rehab Costs that is fantastic!
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Wale LawalBusiness Member
Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
4y
@Kellie Powell
Congratulations on flipping your first home!
I will suggest that you clearly define what you what and do some research.
You can be in touch with local real estate professionals like agents, lenders, investors etc. to understand the current local market.
Do market analysis on current rents, potential rents, appreciation, etc.

Have your investment goals and then plan according to your investment goals.
Good luck and go make it happen!
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