Investors Beware

  There are a significant number of investors taking advantage of the lower prices of homes in Lake and Mendocino Counties.  Several of my clients recently are some of those investors and in each case they were told or assumed that no inspection was necessary.  How could that possibly be?  In every case, the house was older, and the house was vacant.  Both of those conditions scream -- INSPECTION REQUIRED.  I can almost guarantee that there are issues.  Hopefully, minor issues but issues that the investor/buyer needs to be aware of.

I know investors may think a house is a good buy and they have purchased lots of properties, so they might as well skip the inspection and do some minor repairs and rent the property out.  Well, just yesterday, for instance, my investor/client met me at his property--a property he was not going to have inspected.  Good thing!  If he had done what he usually does, he would have paid too much for the property and he would have assumed liability for someone's health and safety that could potentially cause a law suit.  The deck was dangerous, falling apart with hidden "fixes" underneath, nails instead of bolts, rotten wood.

A deeply discounted property that needs "some" repairs or updating might be an excellent premise for a movie.  In fact it was.  Tom Hanks' movie called The Money Pit.  Hilarious to watch this couple uncover unknown defects and have to figure out how they were going to pay to remediate them.  But if it's you in this situation, I'm pretty certain you won't find the hilarity in it.

Think of a professional home inspection as "insurance."  Insurance that you absolutely know everything there is to know about the property.

It is not a good deal until you know exactly what you are getting.  Only then can you decide if it is worth what you have to pay.

One investor told me that he has purchased several rentals in the last few years and without exception, the repairs have cost him more than double his original estimate.  Does he have money to burn?  I don't know, but I do know that he could have used a small portion of that extra money he spent on unknown repairs to keep the rest in his bank account.

You have probably been told that the bank who owns the abandoned house is selling it "AS IS".  Good for the Bank that they don't think they have to abide by the Full Disclosure Law in California.  That doesn't mean you have to stamp "stupid" on your forehead and just accept it "as is."  Get a professional home inspection.  Know what you are buying.