← Real Estate Rookie
Real Estate Rookie
10+ Things to Inspect Before You Buy a Rental Property (Foundation to Roof)
00:42:55
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- [00:00]
A
Most buyers walk through a house thinking about paint colors and kitchen counters. Ellie Ridge grew up scaling rooftops and crawling through half framed walls with her contractor family.
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B
And today, As a top 1% realtor, she's going to show you exactly what to look for before you ever even sign on the dotted line so you don't inherit someone else's six figure night.
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A
This is the Real Estate Rookie Podcast. I'm Ashley Kerr.
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B
And I'm Tony J. Robinson. With that, let's give a big warm welco. Ellie. Ellie, thanks so much for joining us on the Ricky podcast today.
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C
Thanks for having me.
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A
Now, Ellie, you've said you were literally scaling rooftops and walking through half framed homes as a kid. What did that childhood do to you to see a house when you walk through the front door?
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C
Yeah, my, my dad's a contractor and so that, that is just about visiting my dad at work. In particular, he's a roof framer. So I have a special interest in roofs and how they're framed and framing generally. But it is helpful to walk through a house and know what is behind the walls and what's underneath the floors because that is where expensive problems often lie. And the piece of homeownership that I think feels very intimidating to new new
- [01:20]
B
home buyers, I think the intimidating piece is so correct. Right? Because for a lot of first time investors, maybe some, the only home they've ever purchased is their primary residence. And that's a very different decision than buying an investment property. And I think there's Ellie, like a massive gap between what a buyer sees as they walk through a property and what's actually happening inside the home's like bones. Where does that gap maybe cost buyers the most money, like not being able to actually know what to look for,
- [01:51]
C
like what system in particular or just
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B
generally speaking, like where have you seen people get into trouble by not looking at a property with the right lens as they're doing their, their, their walkthroughs?
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C
Well, where I work we don't have any new construction. So all of our homes are about 100 years old in the Bay Area of California. So it can be catastrophic if people aren't looking into the systems beyond like a remodeled kitchen or like a nice backyard. Replacing a foundation or rewiring a home is very expensive. So not budgeting properly for not just what your home will cost, but what it will actually cost to take care of and maintain and live there as a responsible homeowner are very different numbers. So a lot of what I do with clients when we're initially looking at homes and doing our due diligence, is start budgeting for what the next five years will look like after they've purchased the home itself.
- [02:50]
B
Let me. Let me just ask, right, because there's. There's cosmetic renovations, and then there's, you know, more structural renovations. What are the things that maybe can lull someone into the trap of thinking that a home's been renovated properly, when in reality it's maybe just like lipstick on a pig.
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C
If it looks really beautiful that. That we've all had that emotional experience of walking into a home that has been, like, beautifully renovated and remodeled. And people fight the urge to say, like, this house has good bones. And what they're referring to is that it looks really pretty, I guess. But what. I mean, it's not that. That's not important. Like, redoing a kitchen is very expensive and invasive in your life, and it's wonderful if it's already been done for you. But that doesn't go hand in hand with systems having been updated, obviously.
- [03:42]
A
For a couple properties that I've bought, like, some of the, you know, they were rentals that were sold as completed and renovated. And a lot of the things that you can, like, look at is just, like, look closely. Like, trim pieces not matching up. Like, you know, just different things that don't make sense into the property when you really, like, look closely. So if you're already seeing that the cosmetic wasn't done correctly, then there's even more of a chance you should be digging deeper. But when you're purchasing the property, you should, at least in New York, you're getting a disclosure of when everything was last updated on the property, any problems the owner is aware of. And you can look on that sheet, too, to see when was the electric last updated, when was the H Vac less updated? When was the roof last replaced? And that can kind of help you gauge, like, okay, they did this full remodel. But, yeah, it's saying that, you know, the hot water heater is, you know, 20 years old. The. The furnace is, and the electric hasn't been updated since it was built in 1960. So I think using the information in front of you and also, you know, going and having eyes on the property or somebody that can. And kind of using those two things together will really help.
- [04:57]
C
Yeah, we get reports here, too.
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A
In what state are you in?
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C
I work in California, particularly in the Bay Area.
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A
Okay, okay. And, Tony, in California and in Tennessee, where you've invested, too, they all provide disclosures, too.
- [05:10]
B
Yeah. Yeah, to a certain extent. But you know, even on those disclosures, sometimes like you can just say like, I don't know, you know, or like unknown.
- [05:16]
A
That's what I put when I. Or na. Or I don't know. And yeah. Yeah. Okay. So the, the next thing I want to talk about is, besides walking through the home and looking at the property is you've actually built a 255,000 following by teaching people about houses on Instagram. What was the moment you realized that most buyers aren't knowledgeable about what to look for when they're making the biggest purchase of lives? Almost completely blind.
- [05:47]
C
Yeah, I started making that page when I was a really, really new agent, before I was even licensed. I work with my mom and so before I had my license, I started going out on brokers tour with her, which is the day that agents tour all the new property the day after they go live. It's Thursdays in this area and I was walking around seeing all these amazing houses and I don't know if you guys have this experience. Are you guys realtors?
- [06:11]
B
No, neither one of us.
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A
No. We have no desire for paperwork or too lazy.
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C
When I first was licensed as a realtor, every house was like so amazing and mind blowing to me. And like I was in the nicest houses I had ever been in. I was like, oh my God, it's so intense. Like, it's so amazing. Crazy. And so I started making these little videos, like, genuinely, like tripping out about the houses I was seeing and how cool they were and all the weird stuff I was seeing. And then that evolved because I think people are interested in weird stuff about houses. And so I sort of backed into it. Like I made those videos from a place of being excited and curious myself. And then I started noticing like, oh, this, this could be a really real way that I'm like, practice a little bit differently and really help people feel more confident, like buying a house, because I have a little bit of a unique knowledge set, you know, and my mom works the same way. We're both very like looking in crawl spaces, looking in addicts, talking about systems and I don't know other agents that work quite the way that we do. So.
- [07:30]
A
So now we know what Ellie is looking at before she walks in the door, but once she's inside, it's a different game entirely. After the break, she's going to walk us room by room through the things that can quietly cost you tens of thousands of dollars and that your standard inspection might completely miss those. We'll Be right back.
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D
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- [09:44]
C
That's host financial.com all right, Ellie, we're
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A
going inside the house now. Let's do it room by room, system by system. Take us through the things that buyers routinely miss that end up being the most expensive. So let's start at the foundation and kind of work our way up. What are the things that you're physically looking at in a crawl space or a basement? And what does it mean if you find those things?
- [10:08]
C
Yeah, so there's a lot to talk about before we even go inside the house. So I'll meet my clients outside and we'll Walk the perimeter. There's a lot of things that I, that I want to point out depending on the style and of the home and the construction methodology of, of that style and that era. So typically what I'll look at first is the roof line. And that will tell us a lot about the risk for moisture damage to the framing, depending on if there's overhangs or if it's a flat roof or a low slope roof. And then I might talk about what gutter, you know, like what gutters there are, like if they're integrated gutters or if they're just standard gutters that hang on the fascia of a roof and that just is a vulnerability or not. So we might talk about that and then I'll find the hat, which is the little door that looks underneath the house. In this area, we have raised perimeter foundations, not slabs. Right. Typically. And not like Poston Pier, which maybe you see a lot of in Texas. So we can open a little door and look underneath to like a 3 foot tall crawl space. That shows us the foundation and the condition of the soil and the condition of what's called the cripple wall, which is the short framed wall between the top of the foundation and the underside of the floor framing of a home. That shows us a lot of things because concrete is very accessible, expensive. And so the condition of the foundation is like my first concern usually also because I live and work in earthquake territory and we're overdue for a major earthquake along our local fault line called the Hayward Fall. So this is what I always warn my clients up is that it's very likely that in the time that they own whatever home they're buying with me, there will be a catastrophic earthquake. Not to be a downer, but like, it's coming. And so these homes, when they were built originally, had very minimal, if any, seismic reinforcement, meaning the house being bolted down to its foundation or being rigidified laterally. I mean, I could go and I don't know how interesting this is for this podcast, but I could go into a lot of detail about the kind of stress of how experiences in seismic activity. But needless to say, the house does need to be bolted down and that little framed wall needs to be braced. So I'm looking for evidence of that. Usually it's not there, and if it's not, we'll talk about what that might cost and the fact that that needs to happen right away before people are sleeping in the home or having their kids sleep in the home and so on. A lot of Houses in this area are split level homes. Like, you walk up, walk up some stairs to go in and then walk up a half story to go up to a bedroom that's over a garage and that's called a soft story condition. And it's its own kind of seismic retrofit. So we'll talk about costs there. So these are just like common things I observe outside.
- [13:04]
B
Ellie, I just want to pause you there because, like, you just, you just listed off a bunch of things that I never would have even thought to ask. Where. How do you start building this knowledge base? Like, did you get some sort of, some sort of certification? Is it just you, you walk so many houses and talk to so many contractors who, like, how does one actually start building the level of knowledge that you've accumulated from, from the work that you do?
- [13:29]
C
Yeah, everything I'm talking about is called out in home inspections for the most part, in maybe less language, like with just fewer words and less detail. So if an agent is like a student of home inspections, which they should be, a lot of this, you know, you'll see time and again, and then you'll start to be able to observe and point out yourself in particular. My dad, like I said, is a contractor and he himself is a licensed home inspector and just kind of like a building nerd. And so, like, that's what my dad and I talk about when we hang out. Like, that's our quality time. I'll go on inspections with him or like visit him at the job site. It's like something we have in common. So it's, it's very bonding for us, but it's also good for work. And so I have this great resource in, in my dad. But none of this information is difficult to access. If you're a realtor who is like, curious and interested, you can, you know, in, in this area, we have home inspections as part of our disclosures. You guys were talking about like seller disclosures. We have seller disclosures, but it's also standard of care to provide a home inspection. There are varying levels of quality, like some home inspections. I could write a better report, frankly. Like, I, I can call things out that aren't there. And some are really, really great. And they're like the home inspectors that I really trust and admire and have learned from. So anyway, long winded way to answer your question that read home inspections.
- [15:10]
B
So that's, that's the basement or the crawl space area. Let's maybe go to the electrical panel next. Like, this is one of the things that a Lot of buyers almost never look at what should they be looking for and what are the red flags that could affect maybe insurance or even worse, safety.
- [15:27]
C
Yeah. So starting on the outside of the box, if it's rusty, that's already a red flag. You don't want water dripping down onto your panel. As you can imagine, people should be really careful opening electrical panels because inside the door there's what's called a dead front cover that's blocking the like live drop from the city or county. And if it's missing and something touches it, you will, you will die. I mean, it will be a really horrible electric shock. So I open them all the time. But just be very careful as you're opening them. But once you open up inside, you should see a bunch of breakers. Those are the little switches and the amperage is listed on them. Amperage is like the, the. You can think. I forget the analogy. There's like an analogy about flow of water. Water.
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B
Oh, you said like the capacity of how much electricity can, can flow through, right?
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C
Yeah, it's like the capacity. And if there is less capacity, or, excuse me, more capacity flowing through it than the circuit can handle, the breaker will pop. So it's, that's an overcurrent protection device. It keeps you safe from fault conditions like being electrocuted or like an electrical fire or something. And we have modern devices inside electrical panels called arc fault circuit detectors and ground fault circuit interrupters that can sense misbehavior basically of current, like jumping between lines. That's called arcing. That can cause a fire or current leaving and not returning to the circuit, which means it's traveling through your body and whacking you. That automatically pops breakers. But when I'm just looking at a main panel, what I'm pretty much looking for is the, the full, the capacity if it's 100, 125amps or 200amps. And that just tells me how much capacity is left and if people can electrify further. I don't know what the discourse around electrification is in your areas, but people talk a lot in Berkeley about electrifying their homes. So that just tells us like, are you, if you want an EV charger, do you need a new panel basically, or like a heat pump or these other modern electric dependent ways to service your home. And then I'm also looking for the famous problematic brands. Cinsco, Sylvania, Bulldog, Pushmatic, Federal Pacific. Those all just need to be replaced right away because they have like various.
- [18:00]
A
I bought a House once that was Federal Pacific, it was the second duplex I ever bought. And right away the inspector's like, these are, this is a fire hazard. You've got to get this out of here. And he said to like, your insurance will probably, if they come and do an inspection, they're not going to insure you because you have this box in there too. So that was one of the things that we had switched out right away
- [18:18]
C
when we bought it. Yeah, my house has had a Federal Pacific panel, but so that's just more cost. Right. Like when I'm walking through with buyers, we're doing a tally to figure out like, does this, how is this, can you afford this house and the projects it needs? Right.
- [18:34]
A
It's like all those little things. Like sometimes looking at an inspection, it's like, oh, there's nothing major, it's just these little things here and there. But those little things can start to add up and add up and add up or become bigger issues down the road if you don't take care of
- [18:48]
C
them right away or the other direction. Like, I feel like the inclination of a lot of buyers is to read a panel or, excuse me, read an inspection and like feel really concerned about the things because it's like, of course you don't, you don't know what is scary or. No, you're doing your best to parse it out. But often the things that feel really alarming in a home inspection aren't a big deal. And the stuff that is a really big deal is really expensive, is not like bolded and highlighted as much. It's kind of funny, I notice we
- [19:22]
A
just interviewed a guest Justin Whitted on and he bought a property that was full of mold. And I guess it was a section of the area that was mold and it was like $2,000. You know, you think of mold and this big scary thing and it was like one of the cheaper costs to his $90,000 renovation, you know. So, yeah, I think there is that like misconception and you have to go and get your quote and actually know what it, it would cost. Now, Ellie, what about the roofs? So roofs are one of the most negotiated items after a home inspection. What does a buyer need to know before they're at the table arguing over who's going to pay for the new roof?
- [20:01]
C
Well, that is not the cadence where I work. We don't, we typically don't write with inspection contingencies and then negotiate based on findings. We actually tend to write fully non contingent offers and do all of our Due diligence in advance. I have never, like, negotiated for a roof replacement. Also, I would never be surprised that a roof needs to be replaced. Like, I can see instantly if it needs to be replaced. So I can't imagine a scenario where I would be like, terrible news. Like, I'm just finding this out. But here's what I'll say about roofs.
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A
I.
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C
They're not a big deal. Like, it's not a big deal. Like, it's over in two days. The roofers come, they do it, and they go, and they give you the bid in advance. Like, people need to relax about roofs.
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B
Well, let me, let me ask you follow up questions, right? Number one, what you know, for you, when you go and see see a roof, what are the things you're looking at to say, okay, that's actually needs to be fully replaced versus maybe just like patching certain parts of the roof? And then what is the type? Like, say we need to do a full roof replacement. Obviously, this is going to be very specific for the Bay Area, but what are you spending right now to replace
- [21:06]
C
a roof in this area? It's like $25,000 for a new roof. So it's not, it's not that. It's not, you know, a material cost, but those projects where it's a set cost that you agree to and one trade comes through and it's over in a matter of days. To me, that's, like, very easy to wrap my head around. Signs of failure in a roof. So the most common roofing material in this area is called composition shingle. Is that the case for you guys? It's the shingles with, like, they're like asphalt or they have little porcelain granules on them.
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A
Asphalt shingles.
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C
Yeah.
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A
And metal roofs are common for me.
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B
Yeah, we don't have any metal roofs
- [21:44]
C
out here, but yeah, they're not metal. They're. They. They have like, they're a fiberglass, and then they have, like, little granules on them. I think that's probably the most common roof type in Southern California. California.
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A
Yeah. No, I, I said that we have metal roofs. That's why he was saying that.
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B
Yeah, sorry, I was just responding to Ashley.
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A
Yeah, yeah, we have the asphalt sink shingles, and then we also have the metal roof.
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C
Oh, not like, really? Because it snows.
- [22:11]
A
Yeah, they just, they last. They last way longer. The metal roofs, they're more expensive, but they're getting more and more common.
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C
They're amazing. Like a standing seam. Right. With like a flat and then, like, the seams.
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A
Yep, yep.
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C
Yeah, they're awesome. Well, in this, yeah. So that no sign of it. They'll never fail. They like have a 100 year life. But comp shingle, which is what we see most frequently in California, I think it's the most common roofing type in the country. Signs of failure are like cupping of the shingle itself. Like it's beginning to cup up, curl up at the edges, cracked, like cracked shingles, obviously missing shingles, but primarily granule loss. So composition shingles are made of like an asphalt. Bituminous bitumen is an asphalt material with added polymers. But anyway, whatever, we can just call it asphalt for our purposes. And then like a fiberglass mat and then these little ceramic granules that protect the asphalt from the sun because it's the sudden, like UV breaks down asphalt over time and then it starts to crack and then it's water permeable. So when you see a lot of granule loss, that's the biggest indication of a roof nearing the end of its serviceable life. And this is how you can spot it. If you stand back and you look up at the roof and you see it like glimmering and glinting, that's the sun showing the fiberglass through. Or if like you see like a gray sheen on it, that's. We are seeing fiberglass. So that means it's, it's time for it to go.
- [23:48]
B
I mean, Ashley, I feel like less of a real estate investor talking to, talking to Ellie because she's just like so technical about how she's breaking everything down. We got to spend some more time together so I can get on your level of like explaining these things. So we talked, you know, crawl space. We talked electrical roofing. Let's talk a little bit about like the plumbing systems next. What are the questions buyers should be asking that never really make it into a standard inspection when it comes to plumbing and drainage.
- [24:16]
C
Okay, plumbing will be in a standard inspection because they, the home inspector can see it and they have to indicate the material type. But shoddy home inspections, when it says material type, they'll write, oh, this makes me crazy. They'll write metallic material. Metallic material is so crazy. So because there's a, there's a major, major difference. And, and what that means, right? Because galvanized steel is a metallic material, but a home with galvanized steel, plumbing, like, that's a plumbing type with like 100, 100 years, 110 years maybe. And that's what was used pre World War II. Well, pre 1950s. So it very much could be Coming up on the end of its service life and like corroding at the interior, depositing rust and minerals into your drinking water and so on. So, you know, you should look into the house or your agent should look into the house and see. And you can see galvanized steel versus copper, which we would be much happier to see. And if it's an older home and you see copper plumbing, and by older, I mean like pre1960s, that means someone's replaced at least some of the plumbing system, the water supply. I don't see this too frequently, but you might also see pex, which is plastic, like the red and red and
- [25:35]
A
blue plastic lines that's really common in my area is the PEX piping.
- [25:41]
C
Where are you, New York?
- [25:43]
A
Yeah. Yeah. Buffalo.
- [25:44]
C
Because they're worried about freeze, I bet.
- [25:46]
A
Yeah. And it's the most, like, flexible that, you know, it won't burst. And it's cheaper too, than copper piping. But a lot of the, like, older built houses have the copper. But basically anyone that's updating will put in packs or they'll, you know, pay more to do the copper. But it's. It's pretty common in our area.
- [26:08]
C
Interesting. Yeah. I don't see packs out here. I don't. I. I know.
- [26:13]
A
I don't like it because all the microplastics are coming into your body when you drink.
- [26:20]
C
Nobody's doing, like, the microplastics. Okay. Here's what won't be in a homeless section is an explanation of your subsurface drainage. Because they can't see it, you know, and so it's like they'll. They'll know if your downspouts are depositing into a subsurface line and they'll probably note cleanouts. But like, do you guys know what a French drain is?
- [26:46]
A
Yeah.
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C
So, like, I love a French drain.
- [26:49]
A
But explain it for the rookie if, in case somebody doesn't know what a French drain is, how it helps.
- [26:55]
C
So a French drain is a solid, rigid, thick plastic pipe with perforations, like little holes along the bottom of the pipe. And it sits in a little trench with like gravel around it. And then you'll backfill gravel or soil or whatever. And the purpose is to gather groundwater and deposit away from the structure. So you'll see a French drain in a U shape around a house often or like an L shape because it's gathering water from a plane and then depositing it away from the house like in the garden or at the curb or something. They're amazing. It's like a simple technology, but it really is, in my opinion the way to mitigate water intrusion under your house, which is crucial for many, many reasons. But people use the word French drain all the time and don't know what it is and the home inspector can't comment on it. So I made a video about this recently on Instagram. But I'll kind of reiterate the main points here, which is that there is no way to know what was done unless the homeowner tells you or if they have like real invoices from a drainage contractor. And drainage contractors don't even really use the term French drain like in their bids because it's such a widely misused and thrown around term. So it's wonderful if you have it, but don't just believe you have it because like a well meaning realtor or like a confused homeowner is using that term. Really. That's, that is one to ask for like receipts or like proof of work. And then if you are in a place like a state or a market where you can do inspections, camera the line and see like what it actually, actually is. Because often you just have downspouts like dumping into a pipe. And that's not a French drain. It's, it's a great subsurface dra, like water management system of its own, but it's not a French drain.
- [28:57]
A
So, Ellie, if a buyer can only ask the inspector three follow up questions in our fake scenario here during the walkthrough beyond what's on the standard report, what are some of these other questions that they should be asking the inspector?
- [29:11]
C
I'm trying to think what's not on a report. I mean it really depends the quality of the report. Some reports are great, but yes, let's just pretend it's like a sort of shoddy, whatever rando report that doesn't have a lot of information about the foundation or like refers it out to a structural engineer. Some things to know are that modern foundations and any modern concrete is full of rebar, which are steel bars that provide tensile strength to concrete. But Pre World War II, concrete wasn't placed with rebar inside of it. So it's really important to know like what era your foundation is from and you then you'll know if it can withstand certain types of forces because it, it may or may not have interior steel reinforcement. There's ways to tell. I mean, would you like me to share? There's ways to tell what era your foundation is from. Okay, well, if your home was built before 1910, you may have a brick or a masonry foundation and often they will be what's called capped or a cap and saddle will be poured, which is concrete that goes on and around brick. In other areas this is less detrimental. But if you are in an earthquake prone area, it's really in my opinion, unacceptable to have a brick foundation. And the way you can tell, I mean, a lot of home inspections won't comment on it because they just, I don't know, don't know. I don't really know why, but often I will observe it and I notice it's not on the inspection. If your foundation is like so wide, like comes in a foot on the interior and then maybe like a foot on the exterior, that's a capped brick foundation. That's not how any foundation was ever originally poured. So in a 1910s or earlier home, if you see this like giant wide concrete stem wall, you know, it's, it's likely was masonry or is masonry that has concrete on and around it. And then you can just look for like, like random bricks that are like scattered around in the crawl space. Like when I see bricks in a crawl space, it's like triggering because I'm like, why, like why are there bricks down here? And so that's something to keep in mind. And then if your home was built between 1910 and 19, like 30, you probably have this very shallow, short concrete foundation that's like straight up and down on the interior and then angled at the, excuse me, straight up and down the exterior, angled at the interior. It's like a trapezoid shape. And this has other vulnerabilities. Like it's prone to tipping and rotation and cracking. And sometimes they can be retrofitted, sometimes they need to be replaced. So these are two older foundation types to be on the lookout for.
- [32:08]
B
Ashley, what's the oldest home you've ever purchased? 1786 or something in Buffalo.
- [32:14]
A
Yeah, I, I, I don't want to say it wrong, but yeah, like the, it has the stone foundation and everything. Like I, yeah, like, like late 1800s, like 1870 or something like that. And then the other half of the house was built in like 1901, I think, or something that was added on.
- [32:35]
B
But I think the oldest house in my portfolio Right now is 2005.
- [32:43]
A
I, the, the newest house is only the, the house I built, which was 2016, and other than that, probably 1960 is the next newest.
- [32:56]
B
My oldest house right now is like a 2005. So I gotta start buying older home so I can, I can speak to speak with you guys right now, but this is the stuff that separates informed buyers from buyers who get burned. But knowing what to look for is really only half the battle. So coming up, Ellie's going to show us how to actually use what we're finding in our inspections as leverage and how the pre offer inspection strategy in a competitive market like the Bay Area can be a total game changer. So we'll be right back after a word from today's show sponsors.
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D
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- [34:34]
C
Nope.
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E
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- [36:42]
B
All right, we're back. So our listeners now know what to look for. The next question is what do you actually do with all of this information, especially in a hot market where waiving contingencies feels like the only way to win. So Ellie, you're in a very competitive market in the Bay Area. Buyers are under enormous pressure to waive inspection contingency. So how do you actually help clients get comfortable making a strong offer without feeling like they're kind of flying blind or maybe stepping into a big issue?
- [37:11]
C
Well, this is exactly why I work the way that I do and why I structure my practice with buyers as an extremely education forward curriculum like I that's how I think about my work with buyers. Like I'm bringing them through a curriculum and the goal at the end is to feel really confident writing and empowered and very clean non contingent offer because that's likely what's necessary to get into the home that they want. So we start out just like you would if you were starting out Learning anything, just seeing houses for fun. No expectation that they are writing an offer on anything that we're seeing. We're just learning. So I'll try to show houses across a variety of styles and show them various vulnerabilities, teach them how to look at houses with a critical eye, and we'll talk about costs. That really makes people feel good to know what things cost to remediate. And then they can have those numbers in their head. And then when they go to open houses, they can look a lot more critically at the homes that they're seeing, right? And look past the kitchen and, like, the cute archways and whatever, look under the house themselves and start observing conditions. So it's. That's like a very proud moment for me when my new buyers are like, yeah, we went to this open house, but, like, definitely needs a retrofit. And so we're, like, deducting $10,000 from our budget. And, like, we saw an oven tube, which is, like an antiquated wiring. So I love that when, like, my buyers have learned how to assess a home's condition on their own, hopefully when we've gone through enough rounds of this and they. It's. They can really start to kind of like, wrap their arms around condition of a home. It feels easy to waive an inspection contingency because it's not that the due diligence wasn't done or that we're skimping on due diligence or putting ourselves in a dangerous position by waiving an inspection contingency. It's that we've already done our investigation, so we don't need that period anymore because we've inspected and investigated. So that is my system for helping people safely. Wave contingencies.
- [39:18]
B
Yeah. Ellie, what about timing? Right? Because, I mean, I think right now we're very much more, at the time of this recording in a buyer's market. But, you know, we all remember a few years ago, like, things were just going crazy. And, like, if you didn't get your offer in within, like, you know, 72 seconds of a listing going live, like, you had no chance of getting it. Do you ever find that the. Maybe the. The process of doing this deep inspection beforehand leads to people missing out on deals? And if so, how do you. How do you try and navigate that?
- [39:43]
C
Well, I am not in a buyer's market. It's very much a seller's market, and there are not enough houses. But thank. First of all, if we miss it because it's moving too quickly for us to answer all of our questions that wasn't the house. I mean, I just, I wouldn't feel right putting someone in a house where we. One, we wouldn't get an offer accepted if we retain an inspection contingency. And two, I just could never have people waive it if there were questions we didn't know the answers to yet. That would be so unethical to me. But the way that timing is handled here is that we have a 13 day marketing period. So I know the cadence. Like that. My life is structured around that 13 day cadence. Go live on Wednesday, broker store Thursday, two weekends of open houses and offers on Tuesday or Wednesday.
- [40:30]
A
It is not like that in my market at all. Like, that's so interesting to me.
- [40:35]
B
So is that. Is that like a Bay Area specific thing? Because the housing market is so tight. Like, is.
- [40:41]
C
Yeah, I. And it's almost a Berkeley specifically. Like, that's how niche this area. Like, I. I pretty much work in El Cerrito, Berkeley and Oakland, like three cities. And like, that's it. Because it's so intense. I mean, I can't drive like an hour away, you know, I mean, it's happening right here and now. Like, I have to be very. Have my finger on the pulse of my area. In Oakland, it's like a little different. Like, homes will come on maybe on like a Friday or something, but for the most part, like, I'm submitting offers on Tuesdays and Wednesdays. Like, that's when offers are taken. And the home probably came on about 13 days before. So we have time, we have that week to. To do all of our investigation.
- [41:26]
A
Now. Ellie, what about after closing? Are you staying in touch with your clients and are there any things that maybe come up that surprise them that they wish they would have known before they purchased the house and something us and our rookies can make sure that we watch out for?
- [41:42]
C
Well, yes, I do stay in touch with my buyers, hopefully because we're friends, but also because I want to set them up for success. And that means like, staying around for the long term to answer questions and like, be a second set of eyes and connect them with tradespeople and share referrals, excuse me. And so on. Hopefully there are not unanticipated things. Right. That's why we're doing so much investigation in advance, to get ahead of as much as we possibly can. But also, I'm a human being and like, we're not literally taking off sheetrock and like opening walls. And so there, there may. There likely will be things that it was Impossible for us to anticipate. That is the nature of a giant living, breathing organism that is a house that is like actively deteriorating, you know, but hopefully we got in front of the, the priciest thing so that, that is less unsettling when they're like remodeling their kitchen and they open the walls and they find that there was like, there's a lot of dry rot at the interior that nobody knew about or something like that. So I guess all of that to say buying a home, like any investment is risky. It's like, it's an amazing investment because it's the only one that eliminates one of your major living expenses, which is like your need for shelter and housing. And it's a built in savings account, right? It like turns a monthly expense into this very high yield savings that you're doing each month. And on the other hand, like it's important to have respect for, for structures which are made of organic materials. In the United States, like we build houses with wood that is actively deteriorating and there is water and rain and in your areas like snow and ice. And so the work is never done. And so I encourage people to have that mindset. Like, yes, it's very important to become very, very. Be very cognizant of the condition of your home and the cost that will likely be needed in the first five and 10 years. And also you're not, it's, you'll, it'll never be finished. Like you replace your roof and then your furnace goes and then you have termites, you know, and then you like start losing water pressure in your guest bathroom and you have to replace a run of old plumbing. But it's so hopefully it's fun and like hopefully the process of working, I hope that my buyers get into it and start to enjoy and appreciate their house for what it is and like what their responsibility to their house is. And that that is something they can be excited about instead of being like, oh my God, it's like never ending, right? But like, yeah, it's never ending, but like, I love it.
- [44:30]
A
Well Ellie, thank you so much for joining us today. Where can people reach out to you and find more information?
- [44:36]
C
My website is eliridge.com and I am very responsive. So if, if people reach out to me on the, like send me a message through my website, I'll be back in touch very quickly. And if you are interested in the stuff I'm talking about my Instagram, my social media is Ellie Ridge realtor and I just share a lot of videos like nerding out about all the things that I talked about today, so.
- [44:58]
A
Well, thank you so much. You were a wealth of knowledge. We learned so much about what to look at at properties and the inspection process. So thank you so much for joining us. I'm Ashley. He's Tony. And we'll see you guys on the next episode of Real Estate Rookie.
- [45:13]
B
Hey, rookies, if you're watching this, we want you to apply to be a guest on the Real Estate Rookie Podcast. That's right. Ashley and I are looking for amazing stories just like yours to be a part of our Real Estate Rookie podcast. Now look, you don't need to be an expert. You don't need to have done thousands of deals. Even if you've done one deal, your story could help inspire the next listener
- [45:31]
A
as a rookie investor. Especially if you just got your first deal. It is all fresh in your minds and you are the best person to tell your story, give your experience on how you got it done to help someone else get their first deal.
- [45:44]
B
So head over to biggerpockets.com guest if you want to be a part of our show again. That's biggerpockets.com guest and we'd love to have you on.