BRRRR w/o due diligence period in ATL. Contractors as Inspectors?

[Sid Desai]

Hi BP,

Rookie doing my first BRRRR (and first deal overall) with an experienced partner and started reaching out to wholesalers. One of the more established ones does a double close and requires you do no due diligence period. Just need to get out there quickly and inspect and put in a non-refundable down payment to hold the property.

Probably a very rookie question, but is having a contractor come out and act as inspector fine? Meaning inspect every inch as inspector would? Guessing if the contractor is good enough this is fine.

Any other quick steps you would take in this situation?

I've been in contact with some good contractors in Henry county area but now looking in Fulton and looking for some trustworthy, experienced contractors that can act quickly.

Thank you!

Sid

[Zach Westerfield]

I have mixed opinions on inspectors. Most are NOT contractors. They simply take a test and become an inspector. I have seen a wide range of inspectors. What an inspector typically does bring is piece of mind. Most have company backed guarantees that will cover the cost of repairs for major items they miss. how difficult it is to actually get them to pay up could be another story. 

I still use inspectors on my primary residence purchases, since most lenders (and insurance companies) will require an inspection report. For investments, I recommend using a good general contractor. A good, experienced contractor will have more knowledge and experience when it comes to rehab. Another reason i dont use inspectors for investment properties (rehab projects) - investors are tailored to the traditional home buyer, and frequently are used as a negotiation tool. I dont need to pay an inspector $400-500 to go see a total gut rehab property and then send me ten pages detailing that it needs to be painted and their are dirty outlets. i am more concerned with the big ticket items that affect a rehab budget. Plumbing, electrical, roof, mold, foundation, etc. In addition, most inspectors will say "looks like the roof needs to be replaced, but recommend getting a licensed contractor to evaluate". skip the middleman and get the contractor. 

The trick is finding a quality general contractor to come out. If they are good, they are most likely very busy. I have a few and it takes 2-3 days on average for them to fit in a walk through. One recommendation, if you find a good one, compensate them for their time. I pay a general contractor $100 to go look at a property for me. Much cheaper than an inspector (maybe I should pay more?). Also be respectful of their time. Dont expect a full detailed quote on the first inspection. Most that i have worked with will refused to take the time for an itemized quote unless they are generally assured of your business. Have them go out to the property, and note what needs to be done to get to your standards. more importantly, have them point out major issues and concerns.