Inspection on REO property

[Jeremy M.]

Do you guys have a professional inspector go thru the property to see how much the repair will be before you decide to buy a REO property? do you do this before offer or after an offer? Or do you decide yourself how much the rehab will be? Do REOs usually need alot of rehabbing?

[J Scott]

There are several ways to do this. Here are a few, in descending order of expense:

1. Get an inspector to do an inspection and give you a list of items that need to be repaired. Use that to generate a scope of work and then get bids from multiple contractors on that scope of work. If you don't have the property under contract, expect to pay for the bids.

2. Get a contractor to do the inspection and give a bid. This is a bit cheaper (especially if you have the house under contract and the contractor has a shot at the work), but with only one bid, the contractor could take advantage of you.

3. Do your own inspection, create a scope of work, and then get multiple contractor bids. The risk here is that if you're not good at doing inspections, you may miss stuff.

Personally, if you're brand new at this, I would start with #1. On subsequent projects, after you find a contractor you trust, go to #2. Eventually, you'll get good at your own inspections and you can move to #3.