3 Steps to Buying a Rental Property: Inspection

What started out a year ago as a friendly venture to purchase “a few” investment properties turned into 12 properties (15 total rental units) and basically a second full-time job. Merry Christmas to me, right?
Thankfully my business partner Ryan, who has more real estate savvy in his right pinkie than I do in my whole head, is running point on the actual transactions. But that leaves me with the exciting (read: terrifying) prospect of renovating at least 8 properties in the next four months. (4 of the 12 are in near move-in condition).
So get ready, because for the next few months my guest posts will be laden with talk of rehabs, frustration with neighbors and the occasional home improvement revelation.
To begin with, I want to share three lessons I have learned in the last 2 months as I have walked 40+ properties to analyze rehab costs. Sit back, relax, and get ready to pity me…

Lesson 1: Looking Through The Windows is Not a Thorough Inspection
When reviewing so many properties in a short time, there is great temptation to simply breeze through them without truly investigating. Don’t do this. When you look through your next property, whether for purchase or for investment, look everywhere. Leave no stone, or closet, unturned.
Case in point: One property that closes in two weeks was clearly move-in ready. Especially since I did not have access and just looked through the windows. I know, not my most brilliant move.
Needless to say I was quite surprised when walking it last week and discovering significant water damage in the hall closet from a 2nd floor laundry room leak. The house is only 4 years old. I guess that’s what we get for buying foreclosures. Looks like the previous owner got as far as to say “Yup, water damage. Let’s ignore it…”
So next time, I will be sure to walk every aspect of the project, from the attic to the basement, and everything in between.
Step 2 – Speak Loudly and Carry a Big Stick
Step 3 – Bring in the Pros
by Deren S. Monday

Deren has spent over a decade in the residential and commercial construction industry, and is a graduate of the Construction Management Department at California Polytechnic State University, San Luis Obispo. He looks forward to 3AM sewer back-up calls from his tenants in a few months… Deren is the author of Your Cheap Kitchen Remodel: A Guide to Your Affordable Dream Kitchen.

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