You got a lead in a potential deal. It may have been found in MLS. Perhaps the bird dog brought it to you, or you got a response from some of your marketing material. Whatever the source, the next possible step is to look at the properties to determine what you need to do (if any) and what you can provide for it. This is often your only chance, and sometimes the only chance to inspect your property and create a rehab budget / offer. Time is often important here. Because if it’s really a deal, you’re likely to be robbed quickly, so you need to act accurately and quickly.
The key to this step is not to overlook anything when doing the inspection. And the key to not missing anything is to have some sort of checklist. Checklists are an important part of this inspection process. It helps you not to miss important components. Believe me, if you try to inspect without any list, you probably miss something and it will cost you money.
So what should the inspection checklist include and what should it look like? I can’t answer that question because everyone is different and the processing of information is different. I have used and tried many different checklists over the years. Some were too long and cumbersome. Others were too short. You’ll probably have to mash up several different lists from different sources together, as I did to develop something that works for you. Whatever you end up with, the checklist should be thorough and very easy to flow. That way, you can get in and out quickly and accurately.
Here are some of the key components on my inspection checklist and a little explanation of what I’m looking for.
12 key components to inspect before buying flip properties
Does the property need a new roof? Well, look at it from a distance. Keep in mind that you may be able to get the best views from the second story or attic windows. Are you wearing shingles? How many layers are there? Does the deck look crooked and rotten? Make a note of what you find.
Take a walk through the building, paying close attention to the structures near the ground. You are looking for a crack. It’s not a small crack. Every building has one or two of them, but it’s the main one. How big is the measure? It’s hard to tell because every situation can be different. If you feel something is wrong, take a closer look. Crawl on-site, on-site, and on-site as needed.
Do you need to replace the windows? You probably only need a storm window. Count the number of windows to calculate the price later.
It’s pretty self-explanatory. Be sure to check for rotten wood, bricks, siding, stucco, and other items that may need to be replaced and include notes.
Find the electricity meter and panel. How old is this? Is the fuse still in use? How about the service? Is it enough for today’s needs or do you need an upgrade? If necessary, consider installing HVAC equipment and high-power equipment such as stoves and dryers.
Does the property have an HVAC system? If yes, how old is it? Does it look like it’s working? Have copper parts such as capacitors been stolen? Take a closer look as this can be overlooked, especially for internal equipment. Crawl into the attic, basement, or anywhere else you need to find out.
Is the copper pipe missing? Is there a sinkhole in the front yard? Do sinks and other equipment need to be upgraded or replaced? Make a note of the current number and the amount needed for a later quote.
Does the interior need painting? In most cases, the answer is yes. Do you need priming? Is there a wallpaper to remove? How about the popcorn ceiling? Please pay attention to these items. I like to include drywall and trim repairs here as well, but you can separate them with a checklist if needed.
Kitchen and bath mods
Does the kitchen look like something Leave it to Beaver?? Does the bathroom have a pink toilet and tub? If so, you’re probably looking at major kitchen and bath mods. How big and how much depends on your property’s goals. For example, is it a retail flip or a rental? Retail flips can cost more than rentals. For rentals, it is advisable to simply repair and paint the existing cabinets rather than replacing them. It also depends on your local market. However, always remember that kitchens and baths sell the place.
What type of flooring do you have? Need to replace? Do you need / use carpet? Can I save a hardwood floor? How many ceramic tiles do you need?
This includes items such as ceiling fans, lamps, doorknobs and window treatments. It’s all these little things that are built into the finished product and look good. Take notes as you pass through the property.
Need to install a stove, refrigerator, washer and dryer? You probably also need a dishwasher and garbage disposal. Don’t forget to look at the water heater. Often, the date of manufacture is printed on the water heater label.
In essence, you are looking at the main components of the property and taking notes. Sometimes these tests are quick and relatively easy. Sometimes when the utility is turned off, the property is full of junk or the owner is following you constantly commenting. Regardless, I try to go to every room (including the attic and basement).I look for both Hidden problem And the obvious. After I complete the list, I start calculating costs as soon as possible while it’s fresh in my head. Only then can I know if there is a transaction.
So what’s on your list? How do you inspect potential transactions?
Please leave a comment and let me know what I missed below!