How do I find someone that understands the construction of a home

Question

Just a quick question, I'm an investor that knows how to run the numbers on homes pretty well and determine if a home will make money based on its curb appeal, comps in the area, and what the home would potentially rent for. Also, including expenses, insurance, property tax, etc., I understand how to "run the numbers" or do the due diligence on a property, but I don't know much about how a home is structured and built. This is an issue for me because when I look inside a home, I don't really know what I'm looking for besides making sure the HVAC isn't too old, and the roof isn't too bad. Other than that, I don't know what else to look for when deciding to purchase a potential buy and hold real estate investment.

Levi Rawlings · Answer

@Jayden Hamilton as others have said, a partner is the way to fast-track your learning and reduce risk. But, if you do want to try and pursue some learnings on your own, I'd suggest starting to look for these factors as you look at houses, and look into these concepts deeper on YouTube:

• Signs of structural issues: Big cracks in concrete, floors that feel like they go up and down, large cracks in drywall, etc.
• Craftsmanship of any work done: Do things look professionally done or does it look like a newbie did it? For example, look at the bathroom tile - are there big lips or are the tile cuts showing? Look at any drywall work - can you see seams all over the house, or poor patchwork around plumbing that shows you where the previous owner might have had issues before? 
• Leaks: Look for water damage (water rings, bubbling paint / drywall), especially in rooms under bathrooms / kitchens
• Construction type: Identify the common construction type in your target area and learn about it. For example, in my neighborhood on the west side of Denver, it's largely single story brick houses from the 60s. I can walk in and know where the load bearing walls are, which quickly helps me evaluate potential costs for remodels and opening up rooms.

There are many others, but this is where I would start!

Jeffrey Donis · Answer

@Jayden Hamilton I'd encourage you to take a general contractor with you on inspections. They can usually give accurate estimates on how much repairs will cost.

Chris John · Answer

@Jayden Hamilton

Such a great question that takes me back to my first purchases.  I was so petrified that I'd miss something obvious.  I still don't know much about actual construction, but have learned tons anyway.

I had a handyman that was kind enough to walk through a few of my first investment properties with me (post-offer acceptance, but pre-purchase) and pointed out what he thought needed to be done and what he'd charge (knowing that he'd end up with the business).  This gave me an eye of what I thought would need to be done and what it would run me for future properties.

I still get inspections to make sure I'm not missing something major like bad wiring, major pluming, or foundation issues, etc.  Even if I thought I knew what I was looking at, I still probably wouldn't trust myself.  For me, it's worth spending the $500 or so on an inspection to keep me out of a nightmare scenario.  I just had an inspection on a 6plex in Jacksonville that spared me a ton of headaches.

Good luck!

Michael Guzik · Answer

@Jayden Hamilton Great question man. I would say if you feel that is your strength to focus on that side of things and find a partner or company to focus on your "weakness". That's what I did with my broker! We were the deal finders/marketing/numbers guys and we partnered with a local builder who needed help with sales and marketing.

I've been fortunate that I grew up in a household where my Dad and Grandpa were both General Contractor's. However if I didn't have their help or guidance, nor my partner's I would ask in FB groups in my local area. Find the right group to join and see who is active and being recommended by people actually doing what you want to do!

Andy V. · Answer

I love the saying "you don't have to re-invest the wheel" because of what I learned in my journey. You don't have to know and be great at everything, in your situation - you don't have to immediately know how to build a house from the ground up. "How?" you may be asking - Joint Venture! You can do this with a builder who maybe dislikes or is looking to hire someone to run numbers and find deals, and they do the actual construction work. Of course this generally comes with a split but 50% of a deal is better than 0% of no deal. Overtime you can make it one of your goals to learn about building, and specific details, trade secrets, etc in exchange for your contribution to the venture. As you learn you both might learn enough from each other to no longer need one another and you can in-house construction and secure 100% of the deals. You can get pretty creative with real estate and partnerships, as long as all parties agree of course. Make sure you also have a solid attorney and cpa to review and guide you.

Gail K. · Answer

I'm not a big one on inspections (gave up on what passes for Inspectors in my area) but a qualified inspector should be able to give you advice on the structure of the properties you view.  Just be aware that for many to justify their fees they MAY have to point out at least one problem area.  You then need to decide whether you wish to continue an interest in this property.

My partner has a long background in roof and truss design and building (his family owned a truss company and early on he began working there).  Sometimes he would comment he like to become a local inspector.  I said heck no; once he inspected a property no one would ever buy it.

Gail

Josue Vargas · Answer

If you are looking for a specific area, city, or town, chances are house development are done by a few dozen (in big cities) or just a handful (in small cities).  Figure out who was the builder and his reputation.  The more you know about builders and litigations in town against the "not so good builders" the better.  Chances are, good neighborhood = good builder.  Look at how the house was built and look around the neighborhood.

Hints:  Take a very close look at the attic spaces or basement (structure seems sturdy with little "why did they put this beam or support here, it seems odd".  Good contractors follow plans.  But also is not just about the contractor or builder, is also a matter of the architect company behind the builder - if that's the case.  Workmanship and materials are a big part of good quality.

Just compare a custom house vs a cookie cutter house.  It really depends on your budget and what are you looking for.  Don't expect same quality for a cookie cutter house vs a custom house.

A good realtor will know who are the good and bad builders in town.  Hopefully you know who built the house so you can do your research.  Other than that, the knowledge will come with years of experience and the more you look the better feeling you will have.  Not an easy task.  Good luck.

C. Milos · Answer

Check out The Confident House Hunter by Dylan Chalk. I knew absolutely nothing about how houses are constructed before and it's been an excellent primer on what to look for in a house's structure and systems, how they all work together, and how it should affect your buying decisions.

Andrew Syrios · Answer

Most contractors could tell you the basics but if you want to know how to build from the ground up (or want to build from the ground up) the people to look up would be developers.

How do I find someone that understands the construction of a home

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