We did the property inspection for the most recent house that we have signed a contract on last night. As usual, we found lots of stuff that we had overlooked. I'm sure once the owner gets all the junk out of the house (the house is packed full of stuff making it impossible to examine most of the rooms) we will find more problems. This remains one of my basic weaknesses. When I was buying property through Realtors, the homeowner was not present and it was fairly easy to go through a house in detail and note problems. Now, I am looking through a house with the homeowner looking over my shoulder and am self conscious about being critical of their home. In one house, I was sitting at the table trying to negotiate with the homeowner and my wife was roaming the house looking at the details. The homeowner was extremely concerned with where my wife was and distracted from concentrating on what I wanted her to look at. Later I scolded my wife. On the other hand my wife is very detail oriented (she has an accounting background) and is great at finding error in documents and problems with the houses.
A second area I need improvement in is estimating costs when using contractors. It is easy to get a price on something and know how much it will cost when you do the work yourself. As our business gets bigger, I am forced to use contractors (and in fact, the hard money lender I will be using for this purchase requires it). I am sure that contractors pad the prices of their services in several ways. First, they increase the prices of materials, second they put in fudge factors to account for mistakes or oversights, and finally they add 20% of more just as profit.
The last area I need more confidence in is market value. I subscribe to RealQuest and can get sales prices of homes surrounding the prospective property. however, without being able to actually go inside these properties, it is difficult to determine how they compare to my subject property. For example, for this property I can find sales in the last 12 months within 1 mile varying in price between $10k and $150K. I eliminate houses that were built in different time periods and are of different styles but still have a large difference between the worst and best.
Education is certainly one area to work on. I just bought PeteYoungs estimating course, so I hope that can help me. Pete also gave some tips on dealing with contractors but they seem like a stretch (getting 3 bids, picking the lowest and then asking 3 more contractors to beat the lowest bid). Lastly, I will have to be bolder when inspecting houses and not be worried about what the homeowner is concerned about. This may in fact work to my advantage when the homeowner knows that I know about all the problems.