As an investor, you have probably come across a real estate deal or two where doing a walk-thru before the purchase wasn’t allowed or you just didn’t have time to do one. Either way, it’s a big gamble purchasing a property like this since you have no idea what’s going on inside that home that could cost you a lot of money.
Having said that, deals like these can end up being a dream come true if you get the property for cheap and there’s nothing major wrong with it. Buying sight-unseen is a chance many investors take to make the big bucks.
More commonly, however, is being able to do a walk-through before purchasing a home. This allows you to see what’s going on inside all areas of the property and gives you an idea of how much it’ll cost to make repairs to bring it up to speed. If you make walk-throughs a priority in your real estate dealings, be sure to run the other way if you find any of the following red flags. If you don’t, you could be spending way more than you bargained for.
1. A Cracked or Crumbling Foundation
Repairing the foundation on a home can be quite costly. Even after spending the dough to repair the damage, the foundation is never as strong as it once was. Before you get yourself into a deal on a property, you must make sure the foundation is in good shape.
If you don’t know what you’re looking at when you inspect the foundation, be sure to take an experienced contractor with you who can tell you what’s what with the foundation. Keep in mind that a cracked or crumbling foundation may be a sign of something bigger happening with the ground around the home, meaning there could be bigger issues later. If a home has foundation issues, it’s best to move on.
2. Major Electrical or Plumbing Issues
Another costly repair is major electrical and plumbing issues. If a home has problems in either area, fixing them is only part of the solution. Before you can even start, you’ll need to get the right permits for the work, which can take a long time. Once you have the permits and the work is complete, then you have to have a licensed inspector come and validate the work, so it receives a seal of approval. After hours of labor and waiting and thousands of dollars spent, you’ll finally have a home that’s ready for sale, but it won’t likely recoup the costs you put into it to get it that way.
As an investor, you’re in the market to make money, but buying properties sight-unseen is a big gamble. It’s best to do a walk-through before buying any home, and when you do, be sure to pay close attention to what you’re seeing. If you notice either of the red flags listed above, forget about the property, and move on to something else.