Posted by ski on May 24, 2006 at 07:58:38:
AYE MATEY. If you fail to follow the above advise, especially by Brandon ('cause I was going to say the exact same thing) you will soon walk the plank of education. In your case I fear that it will not be a pleasent swim.
home inspectors ? - Posted by shaun
Posted by shaun on May 22, 2006 at 24:26:14:
basically im in the process of my 1st rehab purchase(fsbo) im going thru the bank for my loan, with the rehabbing out of my own pocket. im going to get a home inspector this week to check out the house before the bank orders the apprasial. my question is what should i expect from my inspector as far as work goes, also are there inspectors who are also appraisers, am i required to have the water and electricty turned on.
Re: home inspectors ? - Posted by BTI
Posted by BTI on May 22, 2006 at 13:01:41:
Shaun
Great post by Brandon, listen to him. You say you bought a fsbo, was he living there and the ultilities were on? Has it been vacant for awhile? I don’t buy anything unless I can check everything. Your sort of vague on details but get out and talk to the neighbors to gather any more info that might be useful, never know what you might find out.
BTI
Re: home inspectors ? - Posted by Brandon
Posted by Brandon on May 22, 2006 at 12:41:24:
Your posts brings up a lot of issues. One of which that really concerns me. That being the fact that you are getting a home inspection done but, then plan on doing a rehab on this property. A home inspector’s primary job is to point out deficiencies in a property, i.e., condition of roof, condition of mechanical systems, etc. I’m sorry, but, if you can’t do this on your own, you really shouldn’t be taking on a rehab project at this point. If you are buying this property with the intent to rehab it, you should know exactly what needs to be fixed and updated in the property, even before you put your offer in.
Now, don’t get me wrong, many people do rehab projects with General contractors and just mangage the contractor. And, if this is your intent. That’s great. But, instead of having a home inspector walk though, you should have your contractor and their subs walk through and give you estimates.
So, herein lies the problem…it seems as though you already have an offer in and accepted on this property. And my guess is that it’s way too high because you’ve probably underestimated your rehab costs. So, my advice would be to get out of this sale. And, the home inspector may be your saving grace here. Now, it may sound like I’m double talking myself. The reason I say this is that most standard RE contracts have home inspection clauses that state if there are too many issues the buyer can back out of the contract. So, use this to buy some time and get some contractors in there to give you some real estimates and then make a new offer on the property.
To answer your other question about the water and electricty…this depends on your bank and your appraiser. Some banks won’t loan on properties without working mechanical systems and the only way to test if a mechanical system is working is to have the utilities on. Other banks will accept an appraisal that doesn’t state the condition of the mechanical systems. You need to ask your bank or lender.
Shaun, rehabs are difficult. I know many experienced rehabbers who still go over budget by 10%-20%. But, you have to remember as Ed Garcia says over on the lending forum, “you make money when you buy”. So, if you buy at the right price, you can go over budget and still make a profit.
Hope this helps. Good Luck.
Re: home inspectors ? - Posted by grim reaper
Posted by grim reaper on May 22, 2006 at 02:10:29:
“am i required to have the water and electricty turned on.” If you are scrapping all the systems, probably not.
If you are trying to eliminate unwanted surprises, have the home inspector check these sytems as well.
It’s not good to start out rehabbing with such a lack of knowledge as to ask this question. Perhaps you could save yourself a bundle if you gain a little education before you jump in too deep.
Ask the home inspector, and pay attention to how he answers the question. If he says no, you’re doomed.