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House flipping without a building inspection is like shooting pool in the dark.  If you cannot see what you are aiming for then you are relying on luck to make the shot.  Unless, of course you are knowledgeable enough to detect problems with HVAC, termites, mold, foundation, rotted out framing, environmental conditions, electrical, plumbing, water damage, and the list goes on.  After a few years in the house flipping business, you may well be able to detect these problems yourself, but why risk it?

Make sure that you use an inspector that is not also a contractor because of the potential conflict of interest.  If he/she is a contractor then be sure to explain up front that they will NOT be contracted to do any of the repair work.   Any inspection should include an inspection report.  This report should list all items that require repair or replacement and potential future problems.   Be sure to ask if the inspection report will include approximate costs and estimated time frame from start to finish.  This information is invaluable when estimating repair costs, negotiating the price (when done prior to contract ratification), and determining the total funding required for a bank rehab loan.  If you do not feel like the inspector was very knowledgeable about his work, you may want to get a second opinion from another inspector.

When investing in other states or jurisdictions, be sure to use a local inspector who is well versed in the local codes, conditions, costs, and policies. 

Real Estate Money Saving Tip

“If you run a small business of any kind, you can pay your child up to $4,400 per year without the child owing any taxes, and without you having to withhold. Use $2,000 of this every year to invest in a Roth IRA for your child - no taxes will be due on the funds when withdrawn, either. Use the other $2,400 to cover school clothing or other items your child needs anyway. Meanwhile, you take a $4,400 deduction for salary to your child”  by “The Simple Man’s Guide to Real Estate”