Must Have Investor Tools for Inspecting REO’s and Foreclosures

Typical Foreclosure Viewing Instructions: Remove the Front Door Yourself!

Most experienced real estate investors and rehabbers have figured out a way to bypass having to be accompanied by a real estate agent every time they view a vacant home or bank owned property.  Some investors decide to get a real estate license for themselves while others have friends as real estate agents that get the lockbox combos for them. Others just sweet talk or persuade the listing brokers into offering up the combos – it’s possible.  These practices aren’t being recommended, so be careful not to get in trouble if viewing a vacant home without permission.  Many agents will actually instruct investors to bring a power drill with them to remove the front door to gain access to the house as long as the door is screwed shut upon leaving.  REO listing agents don’t make a lot of money per deal, so they have to concentrate on volume.  It’s all about relationships. Befriend an agent at a local REI club meeting and you may get access to all the foreclosures you ever wanted.

Viewing several (6-8) foreclosures in a morning is very tiring and always an adventure in of itself.  This is especially true for those investors choosing to invest in the rougher neighborhoods due to the above average cash flow opportunities these hard hit areas present.  One day, I managed to walk through and estimate the rehab costs on 11 REO’s while in pursuit of my next rehab project.  I was mentally and physically drained at he end the day, but it was this process that helped me develop the knowledge I needed to eventually stop viewing every property prior to placing an offer.  Based on certain neighborhood generalities and housing types, I created a worst case scenario formula for placing offers.  If the numbers made sense, I submitted an offer without ever viewing the property until it was actually under contract.  This is what really kick started my real estate investing career while simultaneously reducing my time away from home.

Property Rehab Tool Bag

tool bag 300x225 Must Have Investor Tools for Inspecting REOs and Foreclosures

Foreclosure Search Tool Bag

After viewing over 500 properties over the years, I have learned that the following tools are essential to maximizing one’s time in the field.

  • Pre-planned list of foreclosures to see and in what order to see them
    • When you leave your house in the morning, there should be no doubt as to where your going first, second, and third that day.  Bring printed maps or directions if needed.  Don’t forget the lockbox combos.
  • 1 million candle power flashlight with spare battery and car charger
    • Most REO’s and foreclosures are boarded up and the electric company has turned the power off to the house.  For efficiency and safety reasons do not try viewing a dark beaten up house with only a small utility flashlight.
  • Back-up flashlight
    • Just in case your spot light goes out and the second battery is drained always carry a back-up flash light in your car so you can at least finish looking at the property your at.
  • Cordless power drill with various bits
    • As I mentioned earlier, in some cases the front door will actually be screwed shut and you’ll need to remove the door to enter.
  • Screws for re-securing windows or doors
    • Always have spare screws for re-securing doors, windows, and boards on your way out.
  • Digital camera or camcorder
    • Even if you took meticulous notes, it is nearly impossible to remember what the first house you saw looked like after viewing 5 others that day.
  • Clipboard/pen and paper
    • Some investors use a checklist when they are estimating the rehab costs of house, especially when starting out and that’s a good idea.  Do this long enough, and you will be able to estimate the rehab cost to within $2,500 off the top of your head after your walk through.
  • Heavy duty boots
    • Sandals won’t cut it when walking through mold, water, and broken boards.
  • Wear pants not shorts
    • Vacant foreclosed homes have sometimes been trashed by their previous occupants; don’t take any chances.
  • A snack and drink
    • This may sound like your in third grade, but when your really in the groove or sometimes not in an area where you wan to stop, the candy bar and drink can prevent a serious headache from coming on.
  • Navigation
    • Never get lost again.  The one negative side to always using GPS, is that it tends to dumb down my natural sense of direction which makes it twice as hard to find something when I don’t have my GPS.
  • Laptop with wireless card or an iPad
    • This is not necessary but definitely very useful.  Have all your info at your fingertips; it’s like never leaving the office.
  • Cell phone
    • One phone call to your real estate agent is all you should need to submit an offer on a hot property.  Also, for safety reasons, never view vacant properties without a cell phone.  It can be pretty nerve racking when you come across a squatter.
  • Pocket knife
    • Necessary for cutting and lifting up the carpet to check for old hardwood floors underneath.  Always look to see what’s under the carpet.  Finding old natural hardwood floors in decent condition always put a smile on my face.
  • Baseball bat (Louisville slugger is my preference) in the car
    • Again, you can never be too cautious.

I would love to hear what other items, tools, or technology other investor’s have utilized to ease their foreclosure house hunting trips.

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