One question that appears to be commonly asked among those who find themselves interested in real estate investment, particularly in flipping properties, is whether or not a real estate inspection is actually necessary. The long and short response to that question is YES and I am going to do my best to explain exactly why this is .
First of all, a genuine estate inspection is the act of getting a qualified (and in several states, licensed) professional take a look around the property you are thinking about and informing you regarding obvious and potential damage or problems with the property. This isn't something you want your own uncle Bob doing, unless of course, good old uncle Bob has received the training and experience to know what to look for in an inspection and know what those things could mean.
Many who are about to flip properties .enter into the situation (particularly first-time flippers) with the attitude they know there are issues with the property which is why they are purchasing the house. The problem is the untrained eyes may miss some problems that should be addressed before moving along to other problems.
As an example, if there were apparent signs of plumbing problems that you could end up a leak behind the actual wall, you wouldn't want to paint that wall or perhaps replace the floors and soon you had the possible drip checked and either validated or denied and repaired if necessary. Otherwise you would likely need to undo the work (throwing away both time and funds) that had already been done by the time you discovered the leak that a reliable inspector would have told you about before you even began working about the property.
Inspections are great prior to placing the bid on a house because they in fact give investors a bargaining chip. For the true (in your mind) investor it is a fact that simply can't be ignored as it directly affects your P/L statement line price. If the roof needs to be replaced you are justified in offering a lesser amount. If the electrical system must be updated, this is something that should be adjusted or amended inside the final offer. These are also things that are easily identified with a qualified and competent home inspector. Any thing that may save time and money is excellent when investing in house and an inspection can do both.
Another great thing in regards to a good property inspection is it often sheds light on how much money that will be needed in order to get the house in excellent working (or flappable purchase). Knowledge is extremely important in this line of work and can mean the difference between dealing with a project (when the repair budget won't go beyond the eventual value from the property) or walking away if the expenses would be too great to turn a decent profit. As an investor you shouldn't take on a property that's pretty much guaranteed to become a failure, it is simply not just a wise financial move to make. It doesn't matter how much the property calls for your requirements on a personal level in the business of investing the bottom line is the only call you should be taking.
More importantly however than the things mentioned above, a proper home inspection can tell you potentially hazardous conditions within the home that the unaccustomed eyes may not take notice of. Some of these items include toxic mold, which may be financially disastrous as well as hazardous to your health; foundation issues, and structural damage that is threatening the integrity with the property. An inspector should also notice the structural integrity of homes that could affect your home when they are weakened or fail altogether. While these things seem so simple, it is usually the simple things that cause the greatest disasters. If you realize it, a good home inspector is among the best tools you might have in your arsenal in terms of flipping real estate being an investment venture.
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