All Forum Posts by: Hector Serna

What is a town inspection? Never heard of that. Was this in writing and was there contingencies in place for the seller doing the work? If not then you are out of luck. Of course you can try to see where to land but if it's a deal you like maybe you do the work needed

The first deal is the scariest and so many of us have been where you are and especially since you're looking at deals that are more money out of pocket than a 50k investment property. It's okay to be cautious, but don't get trapped into the fear that you're making a bad move. Learn from each experience and when it's your time, it will feel right. 

For properties where the utilities are off, this can help you discover potential plumbing issues:

At the home improvement stores, you should be able to find the fittings to make an adapter for connecting an air pressure tank or portable compressor to a hose bibb. You need a male quick-connect fitted to a female hose fitting. Even just a pressurized air tank can help you find if the plumbing will hold pressure. Turn off all the faucets and the shut off under the toilet(s), then apply air pressure to the hose bibb and open it. City water pressure is around 50 PSI in many places, so no worries. If the pressure doesn't hold or you notice water being forced out of any pipes, you know it may have plumbing issues.

For electrical, FHA inspectors use a generator connected to the power panel. I don't actually recommend anyone to do that. However, what you may be able to do is use a power inverter - 12V to 120VAC. Make a connecting cable so you can plug the output of that into a wall socket. Turn off all the breakers, unplug the fridge, and test circuits one at a time by connecting the inverter output to a socket and test other sockets on the circuit with a drop light or a lamp. If the converter reports an issue or the light doesn't come on, there are likely electrical issues.

Gas, of course, is another matter. Don't mess with it.

Just some ideas. Others may provide better input for you.

If you can find a class on home inspections, that might help you know what to look for. Especially around older communities like Cicero or any older homes, you want to look for what's known as "knob and tube" wiring - individual conductors, possibly uninsulated, strung inside walls and other spaces using ceramic "knobs" as insulating suspension. The tubes are ceramic pieces insulating a wire passing through a rafter, stud, etc.

Hope this helps ...

@Hector Serna PLEASE take Jonathan up on his offer to talk through your situation. I have no dog in this fight, but the point of these forums is to connect people with more experienced investors and get answer to common (and uncommon) questions or problems. I don't know Jonathan, but from my experience seeing him on the forums, he knows what he is doing and has nothing to sell. You'd be wasting a golden opportunity if you did not get on the phone with him.

 I think you've received a lot of good feedback here. 

First deal - Obviously without a home inspection, there wasn't much you could do to catch the foundation and plumbing issues. That's just bad luck but at least you avoided that nightmare.

Second deal - The listing agent normally discloses if there are multiple parcels associated with a given property, which it sounds like they did not in this case. At least your attorney caught it though.

Third deal - Getting the utilities turned on was a preventable issue if the listing agent and your agent were communicating about the inspection. I've had to learn this same lesson so unless you've dealt with it before it can be easy to forget about.

 General tips:

-In the Chicago suburbs, be aware of the village compliance inspections and is the buyer or seller responsible for those? A lot of times the listing agent will post the inspection report on the MLS and have the property sold as is, so the buyer has to take on those repair items.

-Get a sewer scope inspection to make sure the sewer line is in good condition. You don't want to get saddled with an expensive sewer repair.

-Get a radon test. It's not expensive and if it turns out there are high radon levels you can use that as a negotiating tool.

If you keep analyzing deals and making offers, eventually you will close on the right property!

@Hector Serna - Sorry to hear about the struggles so far. 

Take those first 3 deals as learning lessons and use that to grow. Going into the next deal you should have a lot better idea of what to look for and red flags to avoid. Don't give up! 

Proud of you! I'm trying to do the same. Best of luck!

For the second home, you would have known what the taxes were when you put in the offer.  A double lot, doesn't mean 2x property taxes.  Taxes are based on the land and home, so it would be higher than if it was on a single lot, but the double lot also opens possibilities. Depending on the house placement, you could split the lots and sell one.  You could build a second home (a suite) and rent that out.