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13 Items to Note on the Interior

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In my previous post, I discussed what to look for outside the real estate to estimate your rehab costs. In this post, I’d like to get inside. The interior is usually much more complex, so there are more components to inspect. You also need to think about how to repair them. How to repair an item is often based on your intent on the property.The property is Retail flip or Buy and hold a rental?? Obviously, you might go a little higher end with a retail flip, which will increase your rehab costs.

Examining the interior of a property is very similar to doing a retailer’s home inspection. Check all the different components that make up the property. Use the checklist to make sure you don’t miss or overlook anything. Here is a sample spreadsheet checklist I use.

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HVAC

Also note that some components of the property may not be turned on or may not be working. This is especially true for foreclosure properties, as banks usually turn off utilities to save on cost of ownership. Therefore, you can’t test the light, so to speak, so you need to be especially vigilant and know what to look for.

Here are some things to keep in mind as you proceed with your next potential transaction:

Precautions inside the property 13

Electrical system

The electrical system is one of the main systems of any building and is composed of many different components. Some are on the outside, but most are on the inside. On the outside, take a quick look at the services, weatherheads and meter boxes. Is the wire old, frayed, and small? Does the whole system look out of date? In that case, you may need new or upgraded services, especially if you plan to add HVAC systems and so on.

The main thing to see inside is the electric panels. Is it a fuse breaker? Recently, people are crazy about Hughes. Do you have enough breakers to handle modern loads? Is the breaker old? Which brand are they? For example, Federal Pacific Breakers have reported issues. Look at the outlets — are there two or three holes? The two holes mean there is no ground wire and can be a problem when going to resale. All of this sounds expensive, doesn’t it? Well, it’s possible. The new electricity service can run between $ 1,000 and $ 2,000, and the new breaker panel can double it.

Plumbing system

This is also a very important system. Copper is very likely to disappear these days, so first check if the system exists. Don’t assume that those pipes are there. Look for them. If the water is on, try all faucets and utensils. Will it leak? Rinse the toilet, flush it, then stop and listen. Can you hear anything like drops or splashes? It should not drip and should be drained smoothly. If not, assume there is a leak or blockage.

Related: How to buy, rehabilitate, rent and refinance 14 properties at once

Look for mold and rotten trees. These are also evidence of leaks. Don’t forget to look outside for pits and green spots in the garden. The sewer or water pipe may be leaking or clogged. Also find a water heater. How old is this? Is it working? Is it properly vented?

HVAC

Is the system operable and installed? Is it old and needs to be replaced? Is a duct installed? Turn on the system. Can you feel the air coming out of all the ducts? Is the air cool or warm as it should be? Replacing or installing a new HVAC system is not cheap. Small sizes can cost over $ 3,500, and a large 5 ton system costs over $ 6,000 for a full installation.

kitchen

Is it avocado green in the 70’s? Is it outdated and needs a complete redesign? Remember that the kitchen (along with the bathroom) often sells the property to both the buyer and the lessor. So a clean, sleek, bright and well-designed kitchen is a good place to invest some money. Kitchens are very expensive and can cost over $ 30,000 at high-end retail stores. However, for a small rent, thousands of people can actually be of great help.

electric appliances

Are they properly placed? Are they dating? If you go to retail sales, you will simply have to put in new appliances. With rental, you can escape with better used equipment.

Bathroom

Is it pink, yellow, or blue? If so, it’s time to modernize. Nice bathrooms can be from $ 1,500 to less than $ 2,000. I’m talking about a complete bowel job with everything from new tubs, sinks, tiles, faucets and more. But don’t be stingy here. If possible, upgrade a little. A nice bathroom really helps to sell the place.

Rehab-Material

wall

Do they need repairs? Are they full of holes and mold? If so, they need to get off and be replaced. Also look for proper trim work. Every transaction also requires paint — there are many. Be sure to budget accordingly.

floor

Look under that old carpet. Perhaps there is a nice hardwood floor that just needs to be refinished. Need new tiles in the kitchen or elsewhere? How about installing carpets and hardwoods? There is a wide range of choices on the floor. Do nice things that endure the challenges of time, both in terms of fashion and durability, and it will be difficult to make mistakes.

Door / lock

Do you need an external security door? Are all doors and knobs located inside? How about the window key? Are they there? Are they filled? These little things are often overlooked, but they can be added together quickly.

Equipment

Need a new lamp or ceiling fan? How about bath and kitchen fixtures? Make a note of everything that is dated, missing, or unavailable, and budget accordingly.

Related: A simple step-by-step guide to rehabilitating your first rental

underground

Take a walk in the basement. Does it smell moldy? If so, there is probably a water problem. Take a flashlight and illuminate it here and there. Look for evidence of water along the floor and see all the joists you can see. Is there any mold or evidence of termites?

underground

attic

Go up to the attic. You may need to check the HVAC equipment, but if not, go there anyway. Look for insulation and look at the roof joists. Also look for strange wiring. For example, old knob and tube wiring works perfectly, but it’s another thing that surprises people.

other

This is a catch-all category of things you can’t find anywhere else that may be specific to the particular property you’re looking at. For example, window treatments or specific moldings. Be sure to add the “Oops” element. If you can’t find the item, look for it. They hid it somewhere. seek.

As mentioned in a previous post, being able to estimate rehabilitation quickly and accurately is one of the skills that every real estate investor should have. Transactions come and go very quickly, so you need to be ready to act quickly. Use these posts to create your own rehab checklist to be ready when a deal is closed.

Investor: What items would you like to add to this list?

Let us know in the comments!

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