The Investor's Property Inspection Checklist
A thorough property inspection is the most critical step in due diligence. Missing a major issue can turn a profitable flip into a financial disaster. This checklist, organized by system, provides a framework for your physical walkthrough, helping you identify red flags and accurately estimate repair costs. It's not a substitute for a professional inspection, but a tool to make you a smarter, more informed investor.
- Visible Cracks: Look for large, horizontal, or stair-step cracks in foundation walls.
- Bowing or Bulging: Check for any inward or outward bowing of foundation walls.
- Level Floors: Use a level to check for significant sloping, which could indicate settlement.
- Water Intrusion: Inspect the basement or crawlspace for signs of past or present water damage.
- Proper Drainage: Ensure the ground around the foundation slopes away from the house.
- Sagging Roofline: A sagging roof can be a sign of serious structural issues with framing or supports.
- Shingle Condition: Check for curled, cracked, or missing asphalt shingles.
- Roof Age: Ask for the age of the roof; most asphalt shingle roofs last 20-25 years.
- Flashing & Seals: Inspect flashing around chimneys, vents, and skylights for rust or damage.
- Gutters & Downspouts: Ensure they are securely attached, free of debris, and drain away from the foundation.
- Attic Inspection: Look for signs of water stains, rot, or mold on the underside of the roof decking.
- Electrical Panel: Check the brand and age. Look for outdated fuse boxes or problematic brands (e.g., Federal Pacific, Zinsco).
- Amperage: Ensure the service is at least 100 amps for a modern home; 200 amps is preferred.
- Wiring Type: Identify the wiring. Aluminum wiring or knob-and-tube can be a fire hazard and costly to replace.
- GFCI Outlets: Test that outlets in kitchens, bathrooms, and exterior locations are GFCI protected.
- Exposed Wires: Look for any unsafe, exposed, or poorly spliced wiring throughout the property.
- Pipe Material: Identify supply pipes (copper, PEX, galvanized) and drain lines (PVC, cast iron). Galvanized pipes can corrode and lead to low pressure.
- Water Heater: Check the age, size, and for any signs of leaking or corrosion.
- Water Pressure: Turn on multiple faucets to test for adequate and consistent water pressure.
- Visible Leaks: Inspect under all sinks, around toilets, and in the basement/crawlspace for active leaks or water stains.
- Sewer Line: Consider a sewer scope inspection to check for cracks, roots, or blockages in the main sewer line.
- System Age: Determine the age of the furnace, air conditioner, or heat pump. Systems over 15 years old are near the end of their life.
- Regular Maintenance: Look for service records or stickers indicating recent professional maintenance.
- Functionality Test: Turn on both the heating and cooling to ensure they operate correctly.
- Ductwork Condition: Check for disconnected, uninsulated, or damaged ductwork in accessible areas.
- Air Filters: A dirty, clogged air filter can be a sign of deferred maintenance.
- Termite Damage: Look for mud tubes on foundation walls, hollow-sounding wood, or discarded wings.
- Other Pests: Check for evidence of rodents, roaches, or other infestations.
- Potential Asbestos: In older homes, be aware of materials like popcorn ceilings, vinyl flooring, and pipe insulation that may contain asbestos.
- Lead-Based Paint: Homes built before 1978 likely have lead paint. Look for chipping or peeling paint, which poses a hazard.
- Mold & Mildew: Check for visible mold growth or musty smells, especially in damp areas like basements and bathrooms.
This checklist is for informational purposes and is not a substitute for a licensed home inspector. Harvey Capital Funding recommends all borrowers obtain a professional inspection.
Beyond the Checklist: Thinking Like an Inspector
While this checklist covers the core systems, a truly effective inspection involves a holistic approach. You are not just looking for individual flaws; you are searching for the story the house tells. Are the problems isolated, or do they point to a pattern of systemic neglect? A leaky faucet is a minor fix, but a leaky faucet combined with stained ceilings, a musty smell, and soft floors indicates a much larger, more expensive water intrusion problem.
Pay close attention to the 'big ticket' items: the foundation, roof, HVAC, electrical, and plumbing. A full roof replacement can cost $10,000-$20,000 or more, while a new HVAC system can run $8,000-$15,000. These are budget-breaking expenses that must be identified before you close. Forgetting to check the age of the water heater or the brand of the electrical panel are rookie mistakes that can cost you dearly.
Always bring a toolkit on your walkthroughs: a powerful flashlight, a level, a GFCI tester, and a camera. Document everything. Take pictures of model numbers, serial numbers on appliances, and any visible defects. This documentation is invaluable when getting quotes from contractors and negotiating with sellers. The more evidence you have, the stronger your position. Ultimately, a thorough inspection empowers you to build an accurate rehab budget, create a realistic project timeline, and make an offer with confidence.
Ready to Talk About Your Deal?
A solid inspection report helps us understand your project. If you've done your homework and the numbers make sense, Harvey Capital Funding is ready to be your financing partner.