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Investing Strategies

Rehabbers: How to Ride the Home Inspector Rollercoaster

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chartCan you think of anyone in real estate who faces more powerful conflicts of interest than a home inspector?

I can’t.

Home inspectors play a vital role in our business, but their position is a complicated one.

Many home inspectors are confronted daily with a “tug-of-war” between two warring factions:

  1. Buyers who seek accurate information about the quality of real estate assets they are considering for purchase
  2. Sellers who seek accurate presentations about “what really matters” at their properties

As such, the home inspector participates in a delicate dance between his two sets of stakeholders – and the wisest stakeholders are able to join in the dance, too.

So, regardless of whether you are buying properties, selling properties, or both, you’re gonna want to listen closely as Bob McIntosh explains “how to ride the home inspector rollercoaster” in today’s lesson.

rollercoasterHe Has Ridden This Ride Before

Bob is a full-time rehabber who proudly runs a thriving and highly-profitable rehabbing business in multiple markets.  He knows a thing or two about dealing with inspectors of all stripes, and today this “red-headed rehabber” has agreed to share another dose of his highly practical knowledge with Real Estate Mogul.

Our previous lessons from Bob have provided numerous insights about the importance of savvy relationship management in the home renovations business, primarily regarding your relationships with contractors and city inspectors:

Against this informative backdrop, it should come as no surprise that Bob is well-versed in many aspects of rehab-related relationship management – including the art of working with home inspectors.

So today's tactical advice is for any real estate investor who wishes to (i) maximize his effective collaborations with local home inspectors while (ii) skillfully anticipating the moves of other stakeholders in this delicate dance.

Specifically, you'll learn:

  • What type of home inspectors should you seek to do business with?
  • When, why and how should you collaborate with your preferred home inspectors?
  • What can happen if you aren’t compatible with numerous home inspectors?
  • When should you “cut into” the dance between inspectors and buyers?
  • When should you “cut into” the dance between inspectors and sellers?
  • How can you profitably nurture your relationship with a home inspector?

Check-out the following video for all of Bob’s helpful insights about home inspectors!

The Red-Headed Rehabber Explains…

{Mogul Elite: Download a transcript and MP3 of this lesson in the Power Pack tools for this lesson.}


Do It To It! Immediate Action Steps

Familiarize Yourself – Familiarize yourself with the local home inspectors in the area(s) where you work.  To find out who they are (and what they are like), talk to friends, family, and agents – and visit open houses, Angie's List, the Better Business Bureau, Yelp, Google and other search engines.

  • Inspectors should have a professional front, a decent website, and examples of what they will give buyers
  • Inspectors should answer the phone when you call, or get back to you within 24 hours

Arrange Some Introductions – Introduce yourself to a variety of local home inspectors, and help each one understand your business model(s).

Negotiate with Inspectors – Proactively negotiate kickbacks with the inspectors who are willing and able to do so.  Note that 10% is the standard rate for these kickbacks, and you will only get paid if they get paid (so the inspector should feel comfortable with this arrangement).

Build Your Team of Inspectors – Find 2-4 home inspectors with whom you can collaborate, and maintain a list of their contact information (ranked in order of preference).

Negotiate with Buyers – Proactively negotiate special arrangements and deals with buyers who are willing and able to “dance” with you and your team of home inspectors.

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