Getting a contractor walk through to estimate costs before trustee sale

6 Replies

Okay.  Newbie question here.  If I'm going to a trustee sale to purchase a property is commonly allowed to do a walk through the house before the sale in order to bring a contractor and estimate costs in order to do the flip?   Just wondering.  I'm definitely going to go to some trustee sales before  actually purchasing, of course.  

You are not allowed on the property and considered to be trespassing.  With that being said I do preview every single property I am interested in purchasing at Trustee sale and do a quick exterior inspection.  You may be lucky and find one of the homes unlocked in order to view the inside but remember you are Trespassing. 

How would you go about figuring out rehab costs then?  Just assume the worst?

outside of the house will tell you a lot about inside. how is the roof ? when was it replaced ? how about windows ? new windows with new cappings installed couple of years ago or original 100yr old lead, string crap ? any cracks in the bricks, how about tuckpointing ? new siding or old siding ? chimney with new tuckpoitning or chimney that will fall apart any minute? how about stairs ..freshly painted or neglected for years. garage ? look at the electrical service (or lack thereof), fencing ? folks who tend to update outside update inside as well. I wish I had the luxury to invite 14 contractors get 4 bids etc.  every house I purchased for rehab I have never seen the inside of it. learn how to do title search, get chatty chatty with plaintiffs attorneys assistants (they know the opening bids.... wink wink), make sure you know know tax situation, liens etc. ...and have plenty of exit strategies 

I am not very good at buying at buying trustee sales right now, but I have one advice for you: NEVER peep into, NEVER enter into an home, be it ABANDONED, FORECLOSED-ON, or a TRUSTEE sale.

If somebody 9-1-1, you can be charged with an INTENTION to STEAL. Again, NEVER enter a house and/or properties you intend to buy if you are NOT authorized to enter.

Good luck.  

Originally posted by @Rita Temple :

How would you go about figuring out rehab costs then?  Just assume the worst?

No , you assume the worst and double it . You may have to evict the former owner , they may trash the house , they may pour concrete in the sewer lines , take the furnace and air conditioners , kitchen, a mountain of trash left behind   etc .   Or you could get lucky and the former owner greets you with a smile and hands you the keys .   Its the roll of the dice 

@Rita Temple I agree with the others. The safest way should be to drive around and ask the neighbors for length of vacancy, drug activity or theft (if they know it). You said you were going to trustees sales, right? A better plan could be to pull the closed trustees activity from last 2 months for your desired county. Ask yourself the following question: how in the world these transactions closed without the buyers inspecting interiors? Hmmm. Pull the addresses. Pick a small sample. Do a drive by of say 5 or 6 of these closed transactions. Are there commonalities between the properties? How deep was the executed discount when compared to the ARV/turnkey comps? Built year? Square footage? Are they now being rehabbed? Contractor truck in the front? Jump out of your car and approach him: "is this house for sale? Are you guys redoing the entire house inside? I am looking for a contractor. What is the scope of the work you are doing here?"... You will be surprised as to the information he will be able to provide (this is gold). More questions if no contractor present: are any of the properties for rent? For sale? How are the neighborhoods? Now go back and see what's coming during your next trustee sale. Are similar properties for sale? Same area? You already know how much the other "guy/gal" paid for his/her unit 2 month ago. Hmmm. Could they potentially be making any money? No? Yes? How deep of a discount do you need to buy without inspecting the interiors? Worst case scenario? .50 cents on the dollar? .40 cents on the dollar? Hmmmm. Trustees sales are not for everyone and the risks are sky high! But where there is risk there is always a reward waiting. Like other RE investments, please do not get in until you fully understand your ways to get out. All the best