Most of us get a home inspection before purchasing our next property, and while I truly believe that having a good inspector on your team is invaluable, I find a lot of them talk for the sake of talking. They feel that if they’re not talking while the buyers following behind them, they must not know what they’re doing. As a certified carpenter and Realtor sitting in on so many “inspections”, I’m able to see right through everything they’re saying. I find that 90% of the “repairs” that need to be done are extremely minor and cost either nothing or very little. While experienced investors get this, I see the eyes of first time investors open in shock while they look at this massive list of repairs. I’m always left shaking my head laughing to myself because I know I could have a handyman whip through here in one day and fix these “repairs” for a whopping $300 (less than the cost of the initial inspection). I’ll say it again; I still believe having a great home inspector on your team is very important as they do catch important things, but how do we find that great inspector who “gets it”?
How to Estimate Rehab Costs!
Estimating rehab costs accurately can make or break your real estate business, and it takes years of experience for even the best rehabbers to master the art. However, you can expose yourself to less risk and get more accurate with your projections by learning how the pros think when estimating construction costs.
Ask Them How Long They Have Been a Home Inspector
If they have been an inspector for a while, it’s likely they’ve “seen it all”. They’re familiar with old homes, new homes, multi-family properties etc. What you want to avoid is the start up inspector who feels like they have to beat their chest with their “knowledge” and catch EVERY little thing to justify their charge. That’s not to say a home inspector who’s only been in the game for less than 2 years is not qualified, but the seasoned inspector has already built their business. They’re done with “sounding smart” and are just going to tell you how it is and leave.
What Trade Were They in Before?
The answer better be that they were in some sort of trade before becoming an inspector! Say they were an electrician for 15 years and are now an overall home inspector, are they really qualified? I mean yes, being in a trade for so long, you are going to pick up knowledge from other trades here and there but the answer should really be that they were a carpenter or general contractor. These trades see everything and have to deal with building codes and passing multiple inspections on their jobs. These are the guys you want. Also, ask them how long they were in their previous trade as well. The longer the better.
Are They Investor Savvy?
This one is really important for you (readers of BiggerPockets). Find an inspector who understands YOUR business. They know that you don’t care about the loose light switch that needs a two second clockwise twist or the downspout that needs to be extended 2 feet ($15 at home depot, oh no!) etc. These are basic things you should be catching as a sophisticated investor. Sure, let them include it in the report, but the guys who put SO MUCH emphasis on these redundant repairs are the inspectors I would stay away from. They like to talk to hear their own voice and will be so focused on “sounding smart” they may actually miss something important, so let them. Just not on your dime!
Photo: Justin Baeder