4 Bed & 1 Bath Investment Property Walk-Through

hey everybody I'm Charla Yarbrough with fixated real estate and I'm here just outside of Seattle Washington walking a property that a wholesaler just brought to us so this is a property walkthrough and I've never seen this house I've seen some photos that's about as far as it's gone and I wanted to do this video with you guys so that you can see how I actually analyze a property when I first walk through it we're not going to go as it's super in-depth on numbers this entire project this video is to be able to show you guys what we look for for huge red flags construction issues floorplan designs how we actually analyzed the walkthrough of a property photos everything you can imagine what we look at so we can put together a nice package on a property so we don't miss anything so later when we actually go buy a house or buy a project we're not having these huge red flags pop up huge change orders it really really really is important to do a great thorough walkthrough when you're at the project the first time some tips on that I want to act like this is the only time I'm ever going to come back to this project ever again so in order to do that I'm gonna take as many photos as possible you guys all have one of these if you're watching this you might be watching it on one of these things so it has a beautiful thing called a camera now that said well we take photos we do it a certain way you're gonna find this out now for the purposes of this video I'm not gonna actually be taking a ton of photos but just remember I would be normally taking the photos the whole freaking time I walk this house all right now on top of that you can also once you get those photos taken you can do something and put them in easily in something like a Dropbox or a Google Drive date it put it before photos label as a property so you never have to come back to this project again and actually be able to reference it later at your desktop computer so this house I can already tell is a pretty messed up house just from the outside looking here the roof I got it's probably reached the last age of its gonna be on it the siding looks like cedar siding the windows look like aluminum maybe wood I haven't gotten into that yet but I'm gonna walk out the outside first to follow me will point out some stuff as we go I've never seen this house so we'll see what we find and then take notes - I'm gonna taking photos normally I'll be looking for huge red flags big issues floorplan issues outside exterior repair issues anything that's gonna cost a lot of money like the roof is obviously one of them so we're gonna check that box off right away I'm gonna try to find if there's any sewer issues I'm gonna try to find out if there's pretty much anything right and we're gonna note it and we're gonna take photos of all of this so that way we can analyze it back at our desktop okay so let's walk around closer I get to tell the paint's already worn out so we're gonna have to deal something with the paint it's it's old cedar siding is the option to replace it I don't think in this neighborhood because we pulled comps before we walk this property and I don't think we're gonna need to be able to replace the siding because it's gonna be a huge expense but I already tell the windows are old wood windows so this is a 1920 something house if I remember correctly we also know the roofs bad but it's got new gutters so that's a bonus right at this point I'd be taking photos of the entire exterior of the house too this siding looking right at it right of it right away this is obviously very very bad now if I'm gonna resell this property for top dollar I can't leave this old worn-out cedar shakes ID it's not gonna be good the Sun is probably hitting this area for quite a long time it's damage that's worked it I'll take a bunch of photos here I can see these windows are messed up already and what I'm looking at what I look through this is most people that look at a property they just glance at this thing and they miss it take a moment and pause I actually scan up and down the whole thing looking for any red flagged when I first started working in this business years ago I knew nothing about construction in a rehab and that's okay if you don't I'm gonna say it over and over again throughout this whole video take photos good photos from afar from up close right because if you don't know what it is somebody else does and you can show them those beautiful photos you don't need to be an expert in all this stuff you just have to have somebody on your team that is so remember that okay so in this case we have an AC unit I don't know if you know this but in Seattle Washington area we don't have a lot of ACS because it's actually cold all the time up here maybe the hottest time is summer is gonna be like 80 so we don't have a lot of ACS that window unit not needed we're ripping that out the window is obviously messed up so we're you know we're gonna have to replace a whole bunch of windows another reason why to take photos is that you forget to count the windows you can go back and count the windows later at your desktop or work with a contractor later to be able to count on the windows and walk through it this might be the only time we ever get to see this property if you're buying this property as a whole as from a wholesaler like we would be on this one it's not very likely we can do a full thorough inspection with a 30-day close we usually you're gonna have to buy this like right away right so this is our only chance so I'm looking at that it's got gas at the property I'm gonna try to find if there's any gas appliances in the house that we can use because gas is a big deal here right we also can see that the barge boards and also the base and the trim in another area there is all messed up some of the flashing we'd have to take care of the roof the sidings messed up or plugins to replace all of that the fence is gone Oh bonus we have one new window that saves us a couple hundred bucks Oh save some money the I so now in the backyard and looking at the backyard alright so once again the roof if you can see they got a nice tarp on it so obviously that's already repaired we don't need to replace it anymore no so we're gonna have to take care of that siding issues in the back we could tell that as well so it's looking like a good portion of the siding we're gonna have to replace so far maybe 50% of it just from first glance because the sides messed up some of it might be saved the thing with cedar shake when you go to rip it off sometimes it just breaks and shatters and you have to replace a bunch of it the hopes are is that we get only maybe have to replace this side so far maybe a few shingles here painted look good you have I can see that the trench over here so my best guess at first glance this is the sewer and they have some new piping that they added so that looks like a brand new sewer line which is a good news for some reason though they put the clean-out below grade so we might have to raise that up fill us in there's probably been a really long time ago because it's already growing in going through that same situation the siding looks pretty good on that siding else of a garage two-car garage there is no panel on it or no electrical meter looks like at least have electrical meter so overhead mast used to have electrical going to this property and now does not so for the garage so there's no electrical in this property at all probably unless I see some oops now we're looking over here so the salary's goes live I'm gonna take photos of all this stuff right looks like this there's electrical to the property somebody ran an extension outlet from inside the house all the way to here now is that good for resale value I don't think it is so we might have to do a new overhead mass going from the house to the garage and put a meter or have a separate meter from the Power Company both are gonna cost a good chunk of change so either we have electrical coming from the house or we run a separate meter to the with the actual power company that's probably to cost more money than just running electrical from the house so we'll probably go that route all this is messed up luckily the siding is pretty cheapest e-111 which is good it is it's locked right so nice security feature so that's a bonus so we don't have to replace that yeah this is a good bonus right is look better left Hey that extension cord works so I was afraid when we first came into this house of the route that the garage is gonna be an old garage that got built sometime in the early 1900s but the fact that it has Engineering trust engineer truss on top means that they either they built this probably in the 50 60 70 something like that so it's looking like it's in pretty good shape it's got a real foundation on it it hasn't drain or there used to be a toilet here okay and it's not too bad garage door needs to be replaced this all is good it just needs some touch-up on the outside the roof is just a little messed up from the actual just roof being worn out now once again I'll just say this again take photos I'm never gonna remember all this stuff off memory and actually when we're done with this video we're gonna come back and we're gonna take full photos photos of this we just didn't think it would be the coolest thing in the world for you guys to see us take lots of photos of a house while you're filming us taking photos right so what did we see so far we walked the entire exterior of the house first that's what we do that 'we also when we take these photos and i go back to my desktop if i took a photo of the front of the house that i'm inside of the house then i go to the garage then i go upstairs and then i go to the bathroom and the photos are all over the place it'll make no sense to me or to anybody else looking at these photos later right so remember have a process our entire team we call on the exterior first we take photos of everything we could see on the outside then we go through the front door and we take photos through the front door then we go to whatever airy room we're in we're taking photos as we go so when we go back to our desktop upload the dropbox or from your phone i can view them if my another team member is viewing them they know where we're walking through the property if i send those photos to a contractor they know what they're walking through as well it's as easy as that one last tip on photos and i'm going to stop taking talking about them date your photos not each picture put it in a folder date it then you know what date you took them when you later go back to your projects after you buy these product properties and you take photos again i can't tell you how many times I've worked with investors and they are trying to show me pictures of their photo of their property they're just going like this forever right with is us we can just go straight on here go to the Dropbox folder click the date we want to look at and it's right there so those are my best tips for you for photos and I'm going to stop there let's go to the front of the house and we're gonna fast forward so you guys don't have to see me walk through this okay so we're at the front of the house we just did the whole exterior now when I go into the property there's a few things that you need to look for when you're walking these properties the first thing I'm thinking is of course the obvious stuff like is it updated is it not is it messed up does it smell right can you taste money right that's a bigger one and but also most importantly floorplan these older houses this is almost 100 year old house they don't always have the most functional floor plans right so can we open up walls is it is it gonna feel right to a buyer if I want to get top dollar for this property when we go to resell it it's great that if it's a 3-bedroom 2bath home and it's fully updated right it's not great if it's a not functional 3-bedroom 2bath and it's super funky right so let's talk about the status of this house we were told that is a four bedroom one at home and I believe it's like between 1300 1400 square feet if I remember correctly we mic the stats correctly for you later and so I'm looking okay four-bedroom one-bath thirteen fourteen hundred square foot home hundred-year-old property right can I add a bathroom based on the comps in this area I would love to be able to add a master suite if I can add a master suite got to make it a four bedroom 1.75 bath maybe I can take away a bedroom if I needed to to be able to get to be a three bedroom 1.75 because also this neighborhood a four bedroom one bath is not as valuable as a three bedroom 1.75 bath or 2 bath right so a master suite is more important can I fit that if I can't the numbers might still work all right so the wholesaler brought us the property and stuff they brought it to us originally for 181 we knew right off the bat that this house but we couldn't buy this for 181 they had a budget of $60,000 attached to it and they were thinking that they can sell it for 300 grand if we bought that based on those numbers you took looking at 180 ish and 60 you're looking at 240 plus a $300,000 resale after holding cost we have a Washington we have 1.78 percent excise tax that we have to pay as well start breaking down all that stuff it look like an okay deal right now after digging into some more and what we found out about the area of what might might happen so far just walking around the outside of this house I'm not feeling any hope so far for that $60,000 rehab budget because from what's on the outside is good Tony's gonna cost me a lot more on the inside and I haven't been in here yet the other factor is a four-bedroom one-bath house of this neighborhood I didn't see any comps that told me that it's gonna sell for 300 grand if we fix this thing up so we're looking at a maybe a 3-bedroom 2bath rebid room 1.75 bath if we can hit that because we need that master suite then maybe it might sell for three hundred and even then our comparables are saying maybe two ninety two ninety five so can we do it for sixty I don't know so far so far I don't think we can and 180 is really high so maybe I can negotiate back down with a wholesaler maybe they'd go negotiate with the seller and Stephanie I'd prefer right now I feel more comfortable less price but let's find out if the rehab sixty maybe we can make it work I don't think it's gonna be the hook so so like I said we're gonna go see how the floor plan is so let's see which I first looks like when we walk in all right so pretty standard nice living room I'm not I'm not too concerned about this I'm gonna guess there's a kitchen behind here because almost every house that's co-ed us here and if you watch HGTV enough you know what we would do we'd open up the kitchen right singing walk right and then let sounds amazing this is a nineteen early nineteen hundred house so there's a very high likely to this is a load-bearing wall without getting into engineering we've just done hundreds of houses probably load-bearing if you're watching this you don't know anything about construction I get an architect or contractor or engineer or somebody on your team that can actually work with you when it comes to these load-bearing situations don't do what I've seen homeowners do or they just say let's open the wall up and then the whole thing starts to drop down we've seen that that's happened to us we've seen it on properties we've worked on so don't do that now let's continue walking through this is a red flag here so we have this is for the furnace this is intake so that's being right in the middle of your walkway is probably pretty annoying for most people so we might have to move that around going in crew area so there's two bedrooms we got one bedroom on the right seems pretty standard one bedroom on the left everything carpet everything's up not updated at all this runways a red flag for me this is a really narrow bathroom it's also got a low door and so this seems small I don't know what it is but maybe people in the early nineteen hundred's cuz we see this all the time with craftsman homes that I think people are just smaller there's nineteen of times here we are now I can't regret a feeling this is like six foot six that you can even stand in here so this is obviously gonna have to get gutted out is the only bathroom in the house that we know we haven't been upstairs yet and you know it's got a closed messed up everything's messed up this all seems very cramped to me and we could probably blow this out and just remove the pantry or like the linen closet completely to make it feel a little bit bigger but even then this is probably two feet apart between the sink and the bathtub and that's not standard these days so who knows what we can do with that we might be able to steal some room from a bedroom or something but that alone I'm already thinking we're going above sixty if you add everything else in the rest of the bedrooms I'm not too concerned about these days all look good to me almost standard bedrooms and let's go to the kitchen obviously outdated there's no eventing for the stove there's absolutely nothing here for cabinetry because it's brand new ish fridge your dishwasher looks like it's gonna work just fine to me right actually yeah it's ready to go you can use that sucker anytime and I'm sure that you guys watching from home you probably helped one just like that right so ah we're gonna have to gut all this if we open up that wall there it looks like this here and forgive me we just walk these houses so many times so that's not hollow there's probably a chimney in here right so a lot of old 1900 houses had chimney venting and just sitting right in the middle of the house right for other wood-burning stoves or other things that they're used and why is this little round like this little square here it's probably a chimney so there's probably there's probably a whole bunch of bricks underneath there all that kind of stuff we're gonna go upstairs holy crap okay I see that so this is the stairs now alright so already I'm already so excited about this house and everything about it just because of this this is probably just killed it for me because so alright I'm walking to the house right I walk in the house like I wanna go upstairs I gotta go through this kitchen and everything and then I gotta hike up these stairs ready to go to the other bedrooms I'm not this looks like a ladder I don't know about this yeah I don't know about this so far so let's let's explore that a second when we go up there we're gonna see if we see the chimney because we're gonna go see the Attic to see if there is what I bet you there is if there is then when we open up this wall here we're gonna have to remove that as well which is going to be another extra demolition cost and so forth bonus we got a brand new washer and dryer those come with that might that might offset a little bit of the money to be able to take care of that was definitely not gonna offset this crap but that's not gonna work very well before man Wow all right so this is the panel unless there's another panel somewhere else it's a square d panel which is fine but this you could tell this is not enough for a 1400 square foot home this is not enough breakers this is very low voltage it's it probably needs to be completely upgraded to a to Internet panel and it wouldn't at 200 amp panel winning bit here so that means that we're gonna have to move the panel it wouldn't fit in this area and I think we build this wall out and add a new panel there we go move the panel and looking at there's a meter on the back actually right there too and it didn't have anything on it so we could probably maybe put the panel on the back as well yes so obviously there might have been some water damage there at one point I'm gonna say one more time guys I say one more time take photos right so when we would just walk that front door blows photos photos we walk through the kitchen photo photo photos walk through the bedrooms go to put photos photos everywhere right everywhere you go this blows now how do i how do I make this actually work on photos right you just take photos here you take post one outside take photos as much as you can if you want to go get brownie points you even draw a little floor plan right hi our camera guy Nate's also a large acquisitions manager one day you'll meet him he likes to he loves Starbucks so what does he do he takes Starbucks napkins and he actually draws the start of the trellis on the back of an athlete but every box of property takes a photo of that and puts it into the Dropbox folder for us so while I was sitting at the comfort of my own home I can actually view what he's actually walking through it you guys can't smell that but we can it smells like cat urine everywhere as well too so I forgot to mess with that when we walked in I'm just I'm a mouth breather so I don't even notice it right now yep it smells like money so let's go upstairs have a real quick thing how do you get rid of cat urine what are you ready cats all right so don't come back and then two is kills oil-based paint we've been actually because it's actually pretty fragrant in here we'd have to remove everything out of here right get rid of all the why I hope you have all the carpet get rid of everything demo out what we need to demo and then you take kills oils bait paint oils oil-based primer sorry and you just coat the heck out of this house and you probably do two coats of it that should seal everything up and once it's sealed up then you could come back now I bring that up to you guys that's another cost so we have to figure that out all right let me hike up this thing so this runaway you got the tread issues so if I put a piece of wood here to block this so there's no toe kick looks like I got about five inches of tread that's not big enough right I think I can remember what code is but it's somewhere between eight and ten inches if I remember correctly so that's very very bad so we have to leave it so I can have this and that's not the code but it is a 1902 nose so far not excited and there's probably no cheap way to fix these stairs because you'd have to re-engineer and move around and bring them fully up to 2019 code and that seems like a lot of work hey let me yeah let me get that couch down right yeah that's not gonna work out too well yeah so red flags everywhere all right so I always saw two bedrooms downstairs and right now I'm not going to assume that they that they're gonna count this as a bedroom so it has a closet here hey look there's that do you know that's like I've done this before all right so this has to go this is sooner block so this looks like they built this thing not that long ago which is crazy which worries me because I didn't see a furnace I saw the first intake I'm gonna guess that the furnace is in the crawlspace here and if the furnace ISM a crawlspace it has to vent out there's gas so I'll put us all together right there's gas on the property furnace in the crawlspace probably a gas furnace it needs to vent out I'm willing to bet you it's venting out through this which means that if we remove this we gotta find another way for the gas furnace to vent out right and there's ways to do that 95% efficiency furnaces and stuff but that another few thousand dollars so it's not looking like it's a $60,000 remodel and Ardath so far now if they're counting this is a bedroom then we're probably also counting that as the fourth bedroom now for viewers that's low if they're counting this is a fourth bedroom one there's no closet I don't see a closet in here at all off because you need technically you need three things for a bedroom you need access a legal bedroom access egress that means you can jump out that window if the house is burning down and then the third thing is a closet oh and a fourth thing you need heat right so this has heat it has egress you can dive out that save your life right if the house is bringing and it's got a really low entrance to the bedroom but it does have a closet the other thing is it doesn't have proper access because it looks like you have to go through this bedroom to get to this bedroom not a real four bedroom house right that's an issue for us so I'm already looking at $60,000 remodel so far not looking too good this is not a true 4-bedroom house this is a three bedroom house with an extra like den area that can't be counted as a legal bedroom we got issues with the stairs right coming up here and we got issues with the actual stairs themselves right maybe if I wanted to go crazy and spend some real money right I would make this whole upstairs a master suite and just call it a three bedroom this being a third bedroom with one of these with adding a bathroom up here and making a master suite that would be pretty good that would actually solve our three bedroom 1.75 percent 1.75 bath right it wouldn't sell the stereo shoes and that really is upsetting me right now you can't tell about my voice but it's upsetting me quite a bit that because this house this is actually gonna be a good house right but this is not an easy fix in in this city if we touch these if they're legally you can legally leave them here but if we touch them then we have to bring it completely up to 2019 standard code right which means we need this is not gonna fly we need seven and a half feet sorry seven foot ceiling height for your head right that's gonna mean that we have to build a dormer here or something like that or we have to move the stairs completely which you can't there's no place to do that downstairs because you got bedroom these sides here right and you got there's no place to do that so we'd have to build a dormer building door more costs lots of permits and lots of construction so that's going to be another issue there so also I can retell too here's another factor of electrical to prime outlets so without even you know checking anything else out on that that means it's not grounded and you already saw the really old panel that was downstairs and so I know that not grounded outlets gonna cost me some electrical their house hasn't been updated forever probably he's got galvanized plumbing but I guess that right this there's just too many factors in this you can tell that this the sheet rocks not done well this might even be like almost like a cork board sometimes that happens in these and it's one thing after another so hope you guys learned a few things from this video I'm already saying we're not going to buy this house without even like say it easy without maybe we'll go back to the wholesaler and say hey bro you did the numbers wrong right if off the top of my head without doing a full analysis I'm spending like a hundred grand on this house if I want to make this a true legal 3-bedroom 2bath house and with the dormer and everything I'm spending some money I'm gonna have to replace all electrical or probably replace all the plumbing that bathroom downstairs is really dinky and small that's not gonna work out the kitchen is completely messed up we have to remove the chimney we have to take care of these stairs the dormer add a bathroom up here it just keeps adding up the siding the roof Yatta Yatta Yatta Yatta Yatta everything right the electrical to the garage this can be a very expensive house the wood framed windows you guys get the point right so keep that I might now what can you do going forward what pictures to get somebody on your team that understands the construction of the property three take your time when you walk a property and if you don't understand what something is take photos of it right act like you're never going to walk this house ever again so how thorough can you be the first time you go through it if you're walking this property with a seller sometimes it can be distracting having conversations with them and you might miss a bunch of stuff take the time if you do the process the same way every single time you're never going to miss something and last but not least maybe have a sheet maybe you have way to be able to track it maybe you make a spreadsheet that says room by room that you can follow to be able to analyze the rehab and get the numbers and I want to put a plug for my boy Jay Scott one of my favorite guys out there one of my best friends he wrote a book that changed my life years ago called the book on how to estimate rehab right so or is it the book on estimating rehab I know BiggerPockets just came out with another edition of it Jay Scott you can get it on at bigger pockets com plug for those guys until then keep following us on these videos and I'm tar Allah fixated real estate and I'll see you guys soon [Music]

Channel: BiggerPockets

Views: 307,483

Rating: 4.8960471 out of 5

Keywords: biggerpockets, real estate, real estate investing, investing, rentals, rental property, investing in real estate, income property, bigger pockets, passive income, investment property, investment property renovation, investment property for beginners

Id: VJXX-Kxx52Q

Length: 26min 50sec (1610 seconds)

Published: Fri Apr 12 2019