Rental Property Investor · Member since 2022 · 11 posts · 7 votes
Hey folks,
I'm new to the real-estate game, and will be starting the BRRRR process soon. Wanting to get insight from you with regards to the Rehab portion. Assuming you have an inspection on the property prior to closing, what all on the inspection report would typically be a red flag to proceed with the deal (because the rehab would likely become a money guzzler)? I've heard foundational issues on a property is a big one, but was wondering if there are other things you all typically stay away from.
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
Inspection reports are vague and are meant to release any liability form the inspector. I would get a contractor to walk the property and have them give you their input on what it takes to get the property rehabbed.
Rental Property Investor · Somewhere over the Rainbow · Member since 2021 · 1k+ posts · 1k+ votes
3y
I'd typically explain the issue then just lower my offer by an amount that makes sense
Foundation - depends. I bought a house with foundation issues - cost me $3500 to fix and the work was warrantied for life. They'll transfer the warranty to the next owner too for 10% of the original cost.
I don't mess with anything catastrophic - major water, major fire, anything majorly structural
Lender · Omaha, NE · Member since 2008 · 1k+ posts · 1k+ votes
3y
It's difficult to answer your question because your tolerance for certain things is going to be vastly different than other people. Most things construction related can be fixed by writing a check. So the question becomes, how big of a check are you willing to write and will the deal still make sense?
Personally, I don't like buying property with major fire damage, or properties that have groundwater intrusion issues that can't be easily fixed by downspout re-routing and/or grading.
Look for galvanized plumbing lines and Federal/Stab Lok electrical panels. You'll want to make sure that if your property has either of these, get them replaced before you lease out the property.
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
Inspection reports are vague and are meant to release any liability form the inspector. I would get a contractor to walk the property and have them give you their input on what it takes to get the property rehabbed.