Property Inspection Guide for Real Estate Investors
Source: www.REISkills.com
Document Purpose: To provide a systematic approach for real estate investors to inspect properties, identify key issues, and accurately estimate repair costs.
Cover Page
<center>PROPERTY INSPECTION & REPAIR ESTIMATE REPORT</center>
<center>REI Skills Field Guide</center>
Property Address: _________________________________________________________
Date of Inspection: _________________________
Inspected By: _________________________
Type of Property: □ Seller-Owned □ Realtor-Listed □ Bank-Owned (REO)
1.0 Introduction: The Investor’s Mindset
When inspecting a property, your goal is not to judge it as a potential homeowner would, but to analyze it as a business investment. You are looking for problems that represent both cost and opportunity. The ability to see past surface issues and visualize potential is a critical skill for a successful investor.
2.0 Key Areas of Inspection
2.1 Deferred Maintenance
These are repairs that should have been done in the past but were neglected. Identifying these items is crucial for estimating your repair costs and negotiating the purchase price.
Common Examples:
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Roof replacement or repair
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Repair of rotten wood (fascia, siding, window sills)
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Fixing broken windows or doors
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Kitchen or bathroom upgrades
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Carpet replacement
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Interior and exterior repainting
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Replacing old light fixtures/outlets
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Landscaping and yard maintenance
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HVAC system servicing/replacement
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Plumbing or electrical updates
2.2 Functional Obsolescence
This refers to a poor design or layout that negatively affects the property’s utility and value.
Things to Look For:
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Bedroom accessible only through another bedroom
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Bathroom located off the kitchen
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Lack of a logical floor plan (e.g., no bathroom on the sleeping level)
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Awkwardly shaped rooms
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Inadequate closet or storage space
2.3 The Critical Question for the Seller
Always ask the seller (if possible):
“If you could change one thing about your property, what would it be?”
The answer often reveals the property’s most significant flaw.
3.0 Viewing Different Property Types
| Property Type | Access Protocol | Key Considerations |
|---|---|---|
| Listed by a Realtor | • Vacant: Agent may provide a key. • Occupied: Agent will schedule an appointment with the seller. |
Be professional and respectful. The agent is your gateway. |
| Bank-Owned (REO) | • Often uses a combination lockbox for investor access. • Keys may not be available; you may be told to “get in any way you can.” |
These properties are often in poor condition. Banks deal with investors regularly and expect self-reliant viewing. |
4.0 On-Site Inspection Forms
Use these forms during your property walk-through to systematically document its condition.
FORM 1: Exterior & Systems Inspection Checklist
Property Address: _________________________________________________________
| Category | Item | Condition (Good/Fair/Poor) | Notes & Photos |
|---|---|---|---|
| Roof | Shingles/Surface | □ Good □ Fair □ Poor | |
| Gutters & Downspouts | □ Good □ Fair □ Poor | ||
| Exterior | Siding/Paint | □ Good □ Fair □ Poor | |
| Foundation | □ Good □ Fair □ Poor | ||
| Windows & Screens | □ Good □ Fair □ Poor | ||
| Doors & Locks | □ Good □ Fair □ Poor | ||
| Decks/Patios | □ Good □ Fair □ Poor | ||
| Landscaping | Yard/Grading | □ Good □ Fair □ Poor | |
| Driveway/Walkways | □ Good □ Fair □ Poor | ||
| Systems | HVAC (Furnace/AC) | □ Good □ Fair □ Poor | |
| Water Heater | □ Good □ Fair □ Poor | ||
| Electrical Panel | □ Good □ Fair □ Poor |
FORM 2: Interior Room-by-Room Inspection Checklist
Property Address: _________________________________________________________
| Room | Floor | Walls/Ceiling | Windows | Lighting/Electrical | Plumbing/Fixtures | Cabinets/Countertops | Notes |
|---|---|---|---|---|---|---|---|
| Kitchen | |||||||
| Bathroom 1 | |||||||
| Bathroom 2 | |||||||
| Living Room | |||||||
| Bedroom 1 | |||||||
| Bedroom 2 | |||||||
| Bedroom 3 | |||||||
| Basement | |||||||
| Garage | |||||||
| Hallways |
Key: G=Good, F=Fair, P=Poor (or use specific notes)
FORM 3: Repair Cost Estimate Worksheet
Property Address: _________________________________________________________
| Repair Item | Scope of Work | Material Cost ($) | Labor Cost ($) | Total Cost ($) |
|---|---|---|---|---|
| Roof Repair | e.g., Replace 20 sq | |||
| Exterior Paint | e.g., Scrape, prime, 2 coats | |||
| Interior Paint | e.g., All walls & ceilings | |||
| Carpet Replacement | e.g., 3 bedrooms, stairs | |||
| Kitchen Remodel | e.g., Cabinets, counter, floor | |||
| Bathroom Remodel | e.g., Vanity, tile, toilet | |||
| Plumbing | e.g., Replace water heater | |||
| Electrical | e.g., Update panel & outlets | |||
| Flooring | e.g., Laminate in living area | |||
| Misc. Repairs | e.g., Drywall, locks, etc. | |||
| Cleanout/Debris | e.g., Haul away junk | |||
| Landscaping | e.g., Lawn cleanup, trim | |||
| TOTAL ESTIMATE: | $ |
5.0 Conclusion: Seeing the Potential
Many investors are scared off by “junkers.” Your advantage lies in your ability to:
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See Past the Repairs: Look past rotten wood and peeling paint to visualize the finished product.
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Educate Your Eye: Partner with an experienced rehabber to see a property before, during, and after renovation.
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Calculate Objectively: Use the provided forms to turn observed problems into a concrete, line-item budget.
By systematically inspecting the property and accurately estimating repairs, you can confidently identify a true investment opportunity and make a compelling, well-researched offer.
