How Does a Home Inspection Work?

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The inspection phase of a home will vary from county to county, state to state in the US, but in general, all inspections will involve evaluating certain aspects of the home before a seller can sell their home to a prospective buyer.

Health and safety are the most important considerations. Basic amenities expected of a modern building should also be in place and functioning properly

Inspections can be crucial to help arrive at a final sale price as well. This process should be used when you are looking to buy a rental property to see If there are any serious issues, and can then determine if the seller needs to fix them before the sale can go ahead. In some cases, you might agree to make the repairs, but would also expect to get the house for a lower price in consideration for the work and money you will be putting in. This process then can also occur if you are looking to sell a property as well, on the other side of the fence. Often though, as the property you are likely selling has been fully renovated, there usually will be less issues.

The usual areas of inspection are:

  • Structure
  • Exterior
  • Roofing system
  • Plumbing system
  • Electrical system
  • Heating system
  • Air conditioning system
  • Interior
  • Insulation
  • Ventilation
  • Fireplaces
    They will also look for problems like radon gas, carbon monoxide, asbestos, termites and more.

Inspection Standards
The American Society of Home Inspectors, ASHI, has “Standards of Practice” which stipulate what must be inspected, and how far home inspectors need to go to report those findings. Sellers who want to get a clear idea of the state of their home and what needs to be attended to urgently can hire their own inspector, who will then give them an evaluation of all that needs to be done. Inspections usually take 2 to 3 hours depending on the size of the house.

Hiring an inspector will cost money, but it can also prevent your sale from falling through further down the road because “deal breakers” have been discovered. I would also certainly recommend when purchase a property you do not intend to renovate

Buyer Inspections when Selling your house
Once a buyer makes an offer on your home, they will come with an inspector to assess the property. This is bound to make most sellers nervous, but if you’re worried, you can book yourself an inspection using your inspector beforehand and ensure you give yourself some time to get the urgent issues sorted in time. This can be a clever strategy to ensure the inspection does not pose issues for you, but again, if the property has been fully renovated, you shouldn’t have too many issues. The prospective buyer may also walk through with the inspector if the buyer is in town.

The Report
When the home inspection is complete, the inspector will write a report and give a copy to the prospective buyer detailing everything that has been found. If there are major causes for concern, they will usually require immediate attention before the sale can go through. They might also report on potential future issues, such as the boiler or furnace or roof, only having another three years under warranty. You probably won’t be required to buy a new boiler etc, but you may have to lower the price of the house.
Remember, the inspector’s generally will always find issues, even with a complete renovated property. I do feel that it is to justify the cost of their inspection with the buyer, but if the items are minor, it does get you a good indication that the property is in good condition

You will have time to fix the issues, and there will be a follow-up inspection. Once all the parties are satisfied that the house is in good condition or agreed price has bee reached, the sale can proceed.

How to Educate Yourself to Flip Houses Successfully

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House flipping is something to get into that has the potential to create a lot of money for you. But there are some things that you have to know going into it. Anyone who’s successfully flipped houses will tell you that you are going to have to have the money to buy the property.

This is something that makes most people pause and think that they don’t have the kind of money up front that it takes to buy a property. You don’t have to use your own money.

You can get the money from lenders and these can be family members, friends, real estate investors and other money lending businesses. You can find some lenders through investment groups.

Just watch the interest rate. If you have good credit and your debt ratio is low, you can take out a loan against property you have, or a line of credit. Some people get creative with their financing for a flip house.

They use a little of theirs, some from family and some from a loan. Some people create a joint venture and split the financing costs. When it comes to deciding the financing amount, always plan on spending more than you think you might need because there are always glitches.

You need to understand how real estate works. You can educate yourself about this by having a mentor in the real estate business or by taking classes in it. But you must know how buying and selling works, how to determine which location is good to buy a flip house in, and what the market is doing.

You need a good figure on what the house will be worth on the market once everything’s said and done. Look for foreclosed homes, homes that look rough but are basically in good shape and homes in sought after locations.

You also need to know how to work on a house. It’s okay to hire those who know what they’re doing when it comes to working on a house, but you need to know what should be done and what a good job looks like on a repair or renovation.

Because otherwise, you won’t understand what has to be done or if it’s being done correctly and up to code. You can have a contractor come out and look at the flip house to tell you what’s going to be involved in fixing it up.

This will help give you a ballpark figure of what you’re going to spend to get the house ready. Just keep in mind that renovation estimates are just estimates. As the work progresses, problems are usually uncovered – so give yourself not only a financial buffer, but a time buffer for getting the project done as well.

When the home is done, make sure it has market appeal by staging the home. There are certain people you’re going to need to be successful with house flipping.

You need someone who’s knowledgeable about the market if you’re not. You need someone to handle the paperwork when you sell the house. You need someone to handle the financial side who can keep the project within budget and moving along.

You need people who are skilled in all areas of home flipping. That includes people who can work on bringing the yard up to a condition that’s appealing to buyers.

You need someone who can put in a floor or renovate a kitchen. You need electricians, plumbers, heating and air experts and any other skilled person to handle areas outside of your expertise.

Understand that time and problems equal a demand for more money. The longer it takes to complete and the more problematic a flip, the more it eats into your profits.

Hit us up if you want any more information on any of these areas!

Is Flipping Right for You?

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A handful of shows on TV have featured house flipping as a way of life. They show the ups and downs of getting into the business. It looks like fun and you might be wondering if it’s something that you should get involved with.

You can decide if that’s the case by taking inventory or your personality and what you have to put into it. Flipping houses is going to be a pretty serious time commitment.

Though it looks quick on TV, reality is different. You need to be someone who has the amount of time that it’s going to take to dedicate to a project. If you’re stretched too thin right now, then you need to wait until you have the time or have someone Do it For you (like us!).

You’re going to have to hire someone to help you. To get involved with house flipping you need to have a team that you can work with. You may have an electrician, a plumber and several other people who can professionally do whatever task is needed. A general contractor can handle a lot of this for you

You must to look at the cost involved. You need to be able to know how to find a good home to invest in. A good flip home should be priced low enough so that after you repair what needs to be fixed, you have a tidy profit.

That means you can’t pay market value for a home. You will need to find the “fixer uppers” that don’t have serious issues in established or even high end neighborhoods that you can afford i, buy, bring the condition up and then sell.

You do have to be able to buy that house, which means you must have some sort of financing ready. This is a step that should be decided before you even look at homes to buy.

To decide if house flipping is right for you, you want to examine your reasons for going into it. If it’s because you think it’s something that’ll make you rich fast, then that’s a wrong reason. This is certainly a good way to make money, but takes time and effort for sure…

You can make a lot of money flipping houses, but it’s not something that you can rush. It’s something that builds your income house flip after house flip. Your first flip or two is to get you started.

There will always be risk involved in real estate properties just like in any other venture, but the rewards you stand to reap can be substantial. If you have some money already on hand that you can invest in buying a flip house, you’re a hard worker and you don’t give up easily when faced with challenges, then home flipping is probably right for you.

Give us a call, or hit us up on Facebook to discuss your options

Is Investing in Rentals still good in a softening market?

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The current state of the market both in Australia and the US is always a big talking point when I meet and chat to investors. Just this week, we held a workshop in Brisbane (great to have met a lot of you!) and I was asked if investing in rentals was still a good strategy if the market is starting to soften.

My personal opinion is “Absolutely!” From what I have found over the years is that in a softening market we have a number of factors at play. Firstly home owners can sometimes get nervous, particularly if the softening is also being accompanied with rising interest rates (which is what is happening in the larger markets in the US). These homeowners can then sometimes sell, and rent for a while, waiting for the market to improve and didn’t want to get stuck with a home that the value had dropped and/or couldn’t afford (the GFC has made many Americans very gun shy on owning homes). This puts more people in the rental market often increasing the demand and therefore, rents.

Second factor is that as some of the areas soften, the cost to get into rentals can get cheaper, more affordable as well, and with rents rising, this gives even more increased ROI on your investments!

Here is an article written recently by Abhi Golhar from Forbes Real Estate Council on this exact topic…Enjoy!

https://www.forbes.com/sites/forbesrealestatecouncil/2019/02/20/rental-real-estate-is-a-sound-investment-for-any-market/#60b7a5c72c26

For any more information on this or if you have any other areas you would like me to cover in these newsletters, feel free to book a call with me to chat!

Multi Family Property Investing Strategies

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I have been asked a lot about looking at Multi-family properties as options for investment, something that is relatively unique to the US. I have done a couple of articles here on this but also now going to run some small workshops on this topic on the East Coast. First one coming up will be Brisbane! We use an app called Meetup to manage these workshops, so if you haven’t already found us on Meetup under US Property Investors look us up! We have groups in Melbourne, Sydney and Brisbane so far and soon to open up in Adelaide and Perth!

Next upcoming workshop is in Brisbane on Monday March 11th, 5:00 pm – 7:00 pm at the Novotel in Creek St Brisbane. We do a 50-60 minute meet and greet/networking to start then around 6:00 pm start the workshop with a 15 minute Q&A at the end.

If you want to come along, click on this link below and sign up. It’s free and bring your business cards to network! We also usually have some seasoned US investors or experts in each of the their particular areas come along and are there to answer questions etc.

http://meetu.ps/e/GpmVj/BHqNf/f

The following one will be in Sydney in late March, dates to be announced, then Melbourne early April! So jump in whichever group is best for your location and stay tuned for updates.

Brisbane – http://meetu.ps/c/3ZFQv/BHqNf/f

Sydney – http://meetu.ps/c/3ZFN3/BHqNf/f

Melbourne – http://meetu.ps/c/3wzf5/BHqNf/f

For any more information on these or if you have any requests for future workshops, feel free to book a call with me to chat!