What inspections are a MUST?

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For a small multi-family purchase from another landlord, inspections are part of the due diligence phase -- this usually happens after the buyer and seller agree on a price (AKA a purchase agreement or a contract). The contract will spell out what things are due and when. To name a few:copies of leasesproperty inspectionsverifying rents (estoppel certificates)security depositsseller disclosing outstanding litigation or insurance claimsThe contract comes first so that the buyer and seller agree on a framework for a sale before the parties spend lots of time and money on inspections, reviewing documents, bothering tenants with intrusive walk-throughs, etc. A home inspector will be able to provide you with a comprehensive look at the property (maybe $450-600 for a 4-unit). A home inspector is a generalist, and if he has concerns about any particular system (e.g. HVAC, foundation) he may recommend that you bring in a specialist to get an expert opinion. Definitely accompany the home inspector during the inspection so you have a chance to ask questions. Since the offer comes before the inspection period, you should walk the house with someone familiar with evaluating property condition -- an agent, friend, contractor, etc -- before submitting your offer. This will allow you to identify obvious problems upfront before you drop $500 on an inspection. It will also help you estimate repairs so your offer amount is inline with your goals for all-in cost.

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@Edwin K. Your contract can include an inspection contingency that allows you to terminate the contract within a certain time window (the inspection period) and get the deposit back. This is an excellent reason to use either a buyer's agent or a real estate attorney to ensure you are protected. They will provide the wording in the contract.If the inspection reveals something bad, you could also ask the seller for a price reduction.Keep in mind that my response at the top of the thread was for a small multi-family property being sold by another landlord. If a new investor is buying an SFR listed by an agent, you should definitely be represented by a buyer's agent to protect your interests.

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@Brian Nordman a full inspection should be done. For me though, nothing beats putting my own eyes on everything. I go through the properties myself even if I am going to have an inspection. There could be something that the inspector may not think is a big issue but it may be an issue for me. I make my decision at that point if I want to proceed then I bring the inspector in. If I can spot something I don't like then I am not going to waste money on an inspector. I always have a walk through clause in my contracts along with the inspection clause. I can walk away from the deal after either stage and get my earnest money back. If the seller won't sign the walk through clause the deal is off.

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When you make the offer if you use the MLS offer form it has the inspection contingency. It gives you 5 business days to have an inspection and you can get an extension if need be. If you are not comfortable with analyzing inspections a home inspector or a general contractor will do the trick. The types of inspections are endless. Lead, radon, well & septic, building, electrical, mechanical, plumbing, etc. This is why we want to build a team so we can use our strengths and outsource our weaknesses. Good Luck.

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Nicole B. From what I've read by taking a general contractor with you on a walk through they should be able to give the best estimate on repairs. If you planned to do the Reno yourself you could take measurements of the floors and wall space to help price out a lot of the materials. It would be time consuming but I assume a GC could give you the quickest answer

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For us newbies, Is there any way to estimate repairs and Reno costs prior to making an offer?

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Is there any way to estimate repairs prior

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Kristopher Hanks wow so watch out for shady sellers? Haha in all seriousness thank you for that information. I'll be sure to focus on those things when I do a walk through.

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@Brian Nordman I always look for structural shifting or cracking. That can be from the footings to roof line. That is the biggest expense. If the structure has shifted at any level it could mean thousands to repair and requires a structural engineer. Anything beyond that can be repaired, but must be accounted for when deciding on a closing price. If I see structural shifting I walk. I had a house under contract that said there was no shifting in the structure in the property disclosure, only to find out with my own eyes that the cinder-block foundation was shifting in a back corner of the house. And it was not a little shifting, a tree root ball was pushing the whole corner of the foundation inward. The tenant told me that the owner was aware of it and tried to patch it many times instead of just taking the tree out and repairing it as soon as it became a problem. The seller lied on the disclosure form in an effort to off load the property to another investor so he did not have to deal with the problem.

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@Kristopher Hanks that makes a lot of sense and is very smart to do that I think I will also include those clauses. What tend to be some of the biggest issues, whether in cost or just all around hassle, that we should be wanting our inspectors to be keeping an eye out for?