Home Inspection Timing as an Investor

Many investors and retail buyers use property home inspections in various ways, but all for the same purpose of finding problems that currently exist you may not be aware of.  I believe the timing of when an inspection is used is very critical for an investor and I'd like to shed some insight into how I've handled them throughout my career, not only as an acquisitions associate, and now broker, but as an investor myself.  When investors purchase property I hear it all the time "should I get a property inspection before I purchase?"  Well, yes and no.  

We're talking about specifically investors looking to purchase and flip for a profit here, so keep that in mind.

There are some instances where investors that are using other people's money across seas find it as a necessity to do the standard "CYA."  I believe in those situations that inspections make perfect sense, especially for a buy and hold scenario.  For the typical day-to-day investor that either flips for a living, or is just getting started, there is a better time to use inspections.  Why would you spend $400 on a home inspection to have an inspector tell you the property is in need of repair??  Yes, I hear some of you saying it already "well, I want to make sure there isn't anything I don't miss."  Listen, we see hundreds of houses every month -- we cannot guarantee anything, but we can direct you in the right direction if there are signs of potential issues -- especially structural whether it's a foundation or plumbing issue. Anyone you're working with that has experience, if not yourself, should be able to do that.  Please remember if you're working with someone local to that market it will definitely help in learning the nuances of the various problems you'll run into -- i.e slabs in Texas to hydro-static pressure on basement walls in Georgia.  This is why contractors exist -- I'd rather have a specialist or contractor in that field tell me how much it's going to cost in repairs rather than an inspector telling me it needs repair.  Make sense?  

So, when is the best time to use an inspection?  I recommend using a home inspection after you've finished your rehab project...here's why.  After you've rehabbed your property you want to get it on the market as quickly as possible.  The next thing is getting the property under contract -- well, what is the buyer going to ask for?  You guessed it -- a due diligence or option period so they order their own home inspection.  We all know how homeowners are and what inspection reports are like -- they're all doom and gloom over the simplest of issues.  Now, if you had ordered one after your rehab is complete to confirm any issues before a buyer does so, it may help save your sale rather than them walking -- even if you say you'll make the repair -- buyers are worrisome and have no vision.  That could be the difference in thousands of dollars on holding costs, additional proration of taxes, and maintenance costs.  

So, next time you do a rehab you may want to consider doing a home inspection prior to listing it -- just in case.  It could save your deal.

Happy Investing,

Manesh Hardeo

GM/Broker

Networth Realty of Atlanta

http://www.networthrealtyusa.com