What does a home inspector do? What sort of process does he/she follow? Who should use one? Well, the answers to these questions are found in the home inspector interview above. A home inspector is vital to the due diligence process. Simply stated, due diligence is the is the final inspection process when you are purchasing a property. It is the time period after you have an accepted offer on the property and the moment before you sign the myriad of dotted lines and receive the shiny keys from the seller or Realtor®. This is your final opportunity to back out of the deal or get issues on the property corrected via price reductions or last minute repairs.
Ahh, due diligence. Even the words sound boring and tedious. You go through the excitement of finding a great property, you end up with a great deal, and your offer is accepted. The euphoria and thrill of the hunt subsides as you reach the due diligence phase. This is perhaps the most important phase of your investment purchase process. No matter how great your deal is, if the property is distressed, you will lose money doing excessive repairs.
Enter Tim Stolba
Here’s the best news of all. You don’t have to go at this alone! A home inspector is a critical member of your investing team and is vital to the due diligence process. In the video above, AssetRover CEO Jeri Frank talks with Tim Stolba, Owner at Prime Time Home Inspections.
What you’ll find out will be eye opening. What if you have a buddy or relative who is a contractor? Do you really have the experts on your side and is a contractor a replacement to a home inspector? Tim doesn’t think so and you should be wary of this!
“I’ve been in houses that, you know, they say that my relative is a contractor, this or that, and usually when they say that, it kind of opens my eyes even more to look for things because those are the ones I usually see the most items on. Even a general contractor doesn’t have first hand knowledge of every kind of component and how it’s put together.” – Tim Stolba
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Better yet, Tim has solid examples of situations where contractors had limited experience on the properties.
“I had a house recently, the house was 3 years old and built by the contractor that lived there. They lived in there with their family and I’m inspecting their house and the smoke detectors were never wired for power. He told me that he was wondering why the batteries were always going dead so fast, and that was why–never wired for power–and he lived in the house. I’ve had other houses where the contractor lives there and has had hail damage and they didn’t even know that, and they’re the ones who built the house!” – Tim Stolba
Of course, some contractors are true experts, but Tim makes a valid argument that home inspections should typically be left to the home inspectors. It really is all about specialization. The home inspector’s craft is inspecting homes and getting into every nook and cranny. This is what they do!
“I get in crawl spaces and all kinds of fun places that most people wouldn’t venture to go to.” – Tim Stolba
One unique benefit Tim provides is his experience with rental properties and flipping houses. If you can find a home inspector who is a savvy real estate investor, your team member provides a double whammy in benefits. “I flip houses on the side, so I just have a lot of first hand experience, not just textbook,” says Tim.
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[00:00:05] Jeri: Good morning, my name is Jeri Frank and I’m from AssetRover, and I’m here with Tim from Primetime Home Inspections. Good morning.
[00:00:14] Tim: Good morning.
[00:00:16] Jeri: So, we’re not sure that most investors or most people out there have a good understanding of what home inspectors do and we thought you would be a great candidate to talk with us today. So, tell us a little bit about your business and how long you’ve been in business.
[00:00:29] Tim: I’ve started in 2007, so about 8 years now. I got into home inspections because I’ve always been around remodeling growing up and I’ve been pretty handy. I’ve worked in building retail for a number of years and worked on my own houses. I thought this would be a good opportunity for a good change that wouldn’t be the same routine everyday, and be able to help people out with their purchases and the biggest investment they’re going to make.
[00:00:56] Jeri: Alright, excellent. So tell me a little bit about the inspection process. Where does it come in the process and how long does it take and what do you get out of that?
[00:01:06] Tim: Typically, it’s after the people make their offer on the property. They put it contingent on the inspection and then my inspection lasts at least 3 hours for actually inspecting the property if the home is less than 3,000 square feet. If it’s really close to 3,000 square feet or over, then I always add another hour on the time. I always want the buyer to me with me for the end to kind of go over everything. [When] I look at everything I tell people from the fence line in. I don’t get into sheds too much. I don’t get into pools, hot tubs, stuff like that, but I will look for any major safety concerns or bring those up if I see them while I’m there.
[00:01:48] Jeri: And what comes out of the process at the very end?
[00:01:51] Tim: People have a list of detailed things. I summarize the major mechanical, safety, and structural. A lot of times people look at those and request things from the seller to be remedied or reimbursement for future remedies.
[00:02:05] Jeri: And, in your eyes, who should use an inspector and why?
[00:02:10] Tim: I’d say everyone should use an inspector. I’ve been in houses that, you know, they say that my relative is a contractor, this or that, and usually when they say that, it kind of opens my eyes even more to look for things because those are the ones I usually see the most items on. Even a general contractor doesn’t have first hand knowledge sometimes of every kind of component and how it’s put together. I have a little bit of knowledge about all of the components and I’m always bringing up things, even on new construction. I just had a brand new condo I did the other day with a lot of things that I’m pretty sure were never looked at by the city inspections.
[00:02:54] Jeri: Can you give an example of something that has been found that’s kind of eye-opening for the person who’s purchasing that property?
[00:03:02] Tim: I had a house recently, the house was 3 years old and built by the contractor that lived there. They lived in there with their family and I’m inspecting their house and the smoke detectors were never wired for power.
[00:03:15] Jeri: Oh wow!
[00:03:16] Tim: And he told me that he was wondering why the batteries were always going dead so fast, and that was why…never wired for power…and he lived in the house. I’ve had other houses where the contractor lives there and has had hail damage and they didn’t even know that, and they’re the ones who built the house!
[00:03:32] Jeri: So you’re crawling in every crevice pretty much, right?
[00:03:35] Tim: Yep. I can’t crawl across a lot of these newer homes in their attics, everything like that, all the ceilings, but yep, I get in crawl spaces and all kinds of fun places that most people wouldn’t venture to go to.
[00:03:47] Jeri: With AssetRover, we are focused a lot on the new investors and what kind of words of advice would you give to new investors who are getting started?
[00:03:58] Tim: Know your market. Know what you’re getting into. Have a list of everything that needs to be done, or could need to be done. That’s where the inspection process comes in. If you have a list for me, when I do the inspection, it’s going to put everything into perspective. If you consult all the contractors, then add at least 10-15% to that price so you know you’re going to be in under budget at the end. I just did a flip house yesterday that I’m pretty sure they never had an inspector come through. Plus, they thought they were the handymen themselves, and I had a 16 page summary of things that needed to be properly repaired.
[00:04:40] Jeri: What are some of the unique services that you or your company can provide for real estate investors?
[00:04:46] Tim: Unique for me would be that if you hire me as the inspector, I own rental properties myself, I flip houses on the side, so I just have a lot of first hand experience, not just textbook. So that’s one thing I think is the major player why the investor would hire me rather than some of these other inspectors that don’t have any first hand knowledge.
[00:05:06] Jeri: What are your thoughts about the corridor and Cedar Rapids area market right now for investing?
[00:05:13] Tim: I think it’s really good. In ’08 when everything started kind of crashing, my inspectors kept on going up and up every year. I’ve never seen a decline. As far as rentals. I really have no problem filling them. It just depends, you know, on what you’re going for in the market but I don’t think there’s any issues here.
[00:05:37] Jeri: So, if someone is interested in contacting you about using your services, how do they go about reaching you?
[00:05:43] Tim: I’m online at http://primetimehomeinspections.com/. If you search Tim Stolba home inspector it will come up.
[00:05:52] Jeri: Thank you!
[00:05:53] Tim: Yep, thanks for having me.