Posted by jim on October 01, 2003 at 09:45:09:
Most times the realtor will allow you to get into the property before you close. Get a hold of someone extremely knowledgeable on foundations, specifically a licensed foundation contractor, and take him through to look at it with you. You don’t have to tell the realtor that it is an inspection because it isn’t. You are just getting an opinion from a professional. If the licensed foundation contractor tells you it is o.k., then great, if he tells you it is terrible, then get out of the deal, or you will lose your butt. You will lose your earnest money, but that is worth it. Foundation problems are the worst and the most costly expense one will pay for rehab projects.
I have been a general contractor for over 10 years and if you are going to be rehabing homes, your contractors will make or break you. You must find a good one. I don’t know how big the house is, but I find it nearly impossible to completely gut the house down to it’s studs and replace eveything for only $15,000. I highly suggest that you don’t hire handymen to do your work, you will be so frusterated, the work will be average-poor, it will take 2-3 times as long to finish the project, and you will not be able to get top dollar for your house. Be very careful in who you hire and get everything in writing before work is started.
In my experience, the successful investors who rehab are those who have quality licensed contractors in there doing the work. Yeah, they may pay 10-20% more to have the job done, but you must figure that into your offers. The work is high quality and they get in and get out. Remember time is money, and the longer your money is tied up in a project, the more properties you are not able to get. There are some very good contractors out there that are very reasonable and if you can keep them busy year a round with your projects, they will be loyal to you. You must think of it as building a team. Find a good contractor and stick with him, if you go out and look for other bids from other contractors on every house, you are going to be in for a long road because there are more bad contractors than good.
Also, one of the best things you can do is educate yourself on all aspects of construction, from concrete to electrical, drywall, painting, etc. The more you know the better off you are going to be and you will know if a contractor is trying to take advantage of you. If you have any questions feel free to email me at firstname.lastname@example.org.