How much will that cost?

This question plays on the minds of buyers and investors when making a home buying decision. This past week I came across an article by a Realtor who was greatly upset by an inspector who wrote down estimates of costs on his report. He felt that this was against the code in Texas, which it is not. For this agent, the true problem was that the buyer wanted a deduction, which was his true complaint.

I began to consider these quick quotes by inspectors, and what their value might be. Giving a rough estimate can be tricky, and it may be inaccurate. I like to give my clients a general idea when speaking to them, but if they wish a written estimate, I prefer to provide that a day later. Here is the thing; I know roughly how long it would take me to repair an item and I know a general cost for the materials, so I base my estimate on that knowledge. However, if we are speaking of something more specific, I think it is better for me to check my facts to produce my estimate on repairs. Generally, for large repairs, I would suggest calling in an expert. For example, foundation companies handle foundation repair differently. This can produce costs from $5000 to $12,000 for a typical sized home to correct the same problem. Should I estimate in the middle of that range, or the high end? In any scenario, I could be giving a figure that may be far different from what the buyer may encounter.

As an investor, you need to have the best information. With this in mind, I would recommend that you give your inspector or contractor time to develop an accurate estimation of the costs to repair a home. This should be at least a day. They should also go into their reasoning for the estimates, and it would be best if they included this in their report. If you are doing this on your own, use a site for a home center to obtain prices of goods. Then imagine how long the job may take. I would use the average cost of labor for any job to be $65 per hour. This is loosely the price different quality contractors would charge for an hourly rate.

Let us create an example. I want a new toilet. If you are unfamiliar with the procedure, look it up in a home repair manual. You will see that you will need a wax ring to seal the base to the drain($3). You may also need a new flange ($10), and a new water supply tube ($6). Then there is the toilet ($230). All of the prices that I quoted are rounded up from parts that I found on Home Depot’s site. You may choose other parts, which can dramatically change the price. So we are looking at roughly $250 in parts. I know that I can pull and replace a toilet within an hour, but let us be safe and say that it takes two hours. The plumber’s labor cost would be $130. Now we are up to $380 for the new toilet, and we would have to add tax. Is this estimate reasonable? Maybe. Toilets can range in price from $200 to $400 on average. A contractor may only charge for the hour, or the may add on a standard fee from their firm for travel expenses and such. That leaves my $380 to be around an average price for this repair. I hope that the one thing that this example shows you is that parts and labor should be separated on your contractor/inspector’s estimate, and you may want to assume that they are choosing the basic part.

I do not think it is a bad thing to ask for an estimate.Just be aware what that estimate might mean.

Your Houston home inspector,

Frank Schulte-Ladbeck

Absentee investors can pay the price

History has taught us one thing at least for the world of real estate investing: absentee landlords are never liked by those who live around their estates. Look at Irish history for a prime example of this statement. As an investor, you can find yourself in a precarious situation too, if you are not careful with who you trust to oversee your affairs. Let me relate a story of one adventure that I had in April.

If I were to judge April by the number of times I went out to inspect a house, I could call it a very good month, but I did not actually inspect as many houses as I went out for a job. A young couple, first time home buyers, hired me to look over a home that an investor was flipping. It was actually a group of investors, who were going after several properties from my understanding. I think this is a wise idea for spreading the risk of the investment. I never met the investors; they were out of town. They were relying on a contractor to have the home ready for sale, and on a Realtor to handle the transaction. The house was supposed to have the utilities on and the appliances installed, so I could do a complete inspection. There were no appliances, and the utilities were off. I inspected what I could.

Over the course of the month, I would be called to go to the home once more. This time everything was to be in order. No such luck. I discovered that the contractor said that he was going to handle having the utilities turned back on and the appliances installed. When he was asked, he told his clients that he had taken care of everything, then I come along to spoil the party.

Several times a week, I go out on my clients behalf, to find that I could not do anything. Since they had paid me for a complete inspection, and they were young buyers, I decided not to press the fact that i was spending more time than I had allotted, and there were costs involved. Honestly, at this point, most inspectors would be charging, but I had a kind streak for their dilemma. Their Realtor indicated that maybe we should make the investors pay for this situation, but I let it drop. By the end of the month, two days before closing, I was able to complete the inspection.

I offer this tale as a warning to investors who are away from their investment properties. Make sure your contractor is reliable, and that he is honest with you. You may find some angry buyers and missed opportunities on your part, and in this market where buyers are scarce, you should not let any potential buyer escape.

Your Houston home inspector,

Frank Schulte-Ladbeck

How to check the plumbing, when the water is off

Looking at homes that have been winterized, you will find that you cannot do a full check of the plumbing system, but water leaks can cause a great deal of damage. There are some signs to look out for in these homes.

1. Check under sinks and water heaters for water stains. Sometimes you can see rust stains on the unit, but you may also see white (mineral) stains too.

2. Look for the rust or mineral stains under faucets or around the handles for the faucets. Worn down seals could cause water to leak out at either location.

3. Is the tile floor coming up in the bathroom or kitchen? This could be from different sources, but water leaks under new tile floors will prevent the mortar from adhering well.

4. Are the toilets loose? If you can rock the base of a toilet, or you can wobble the tank portion, water can leak out of the seals.

5. Check that pipes are secure. I found a pipe that been broken in the wall, but it had been shoved back into place, so no one would notice. Giving the pipes a little jiggle may tell you if there is a break.

6. Look for gobs of silicone. Silicone is used as a cure-all for plumbing problems. Many people will just put more on in the hope that it will stop a leak.

7. Are there buckets under the plumbing? People keep buckets in areas where leaks occur to catch the water, but they forget to move them if you are coming for a look.

8. If the home has two stories, look at the ceiling below plumbing locations. If you see stains, it might be from a leak.

9. New boards placed under sinks, or wall patches around plumbing locations are indicative of possible problems.

10. Did someone mention a flood? To cover up some plumbing issues, a seller kept talking about a rare flood having effected a home once. Houston sits on flat land, so flooding is an issue, but ask the neighbors about area floods to find out more.

These are the top ten things to look for when the plumbing is off. If you do notice any of them, you should arrange to have the water turned on, so you can take a better look. It would be wise to remember that leaks happen all of the time, and they are frequently repaired. Even after the repair, the stains will still be there.

Your Houston home inspector, Frank Schulte-Ladbeck

How to Examine a Water Heater

Any buyer will want to know if the equipment in a house is working. As an investor who may be renting the home, you will need to have a working water heater according to Texas law. When you are looking at a property to purchase, the water and power may have been turned off, so how do you tell if a water heater will suffice?

Most water heaters are tank models, and you will not be able to determine function until it is functioning, but there are some clues for you to consider. How many times a year do you flush out your own tank water heater? The water that we have in this area contains minerals which will build up in the tank, which affects its performance. The sediment builds up at the base making it harder to heat the water. If the unit looks older, you probably have this build up. It does not mean that the unit will not function, but it could imply that the unit will not function well. If the unit is heated by gas, you will want to look at the burner chamber. This will be at the base of the unit, and there will generally be two covers that need to be removed. If the chamber looks very rusted, or if it looks damaged to you, you may have a performance issue. For electric units, you will not be able to see the heater elements, unless you remove them. There will be two covers for the controls for each element. One will be a third of the way up, and the other will be two thirds of the way up. Look to see if the wiring looks good at these controls, and look for any burn marks.

Next we can examine the tubing coming into the unit. For gas units, look to see that the tube is marked for gas use. Look for a shut-off valve for the gas. Check the condition of these parts. There will be two pipes for water: cold water in that should have a shut off valve on it; and a hot water pipe out. For these pipes, you will want to look at any location that has a joint. It is at these locations that you will see signs of water leaks. The last tube to examine will be from the TPR valve. TPR stands for temperature pressure relief valve. If the heater’s pressure builds to where it can explode, this valve will release the steam/hot water. It should have a CPVC tube attached to it, that exits the water to the exterior (close to the ground). This tube should not have any loops. It should allow the water to drain by gravity. One last pipe will not be on the unit itself. It will be on the pan under the water heater, and this tube should drain water to the exterior too. The pan is important when the heater is in the house proper or attic. You do not want water leaking from this unit damaging your property.

If the unit is in the home, it should be on a stand, at least eighteen inches high. If the unit is in the garage, the unit should also be on this stand, and it should be protected from being hit by the car pulling into the garage.

For gas units, there will be a duct that takes the fumes from the burner out of the house. Look to see that this vent is secured, and that it does take the fumes out.

These are the basic things to check, but you will never really know, until everything is turned on to know how it works.

Picture is a gas water heater with the duct and pipes on top, and the burner compartment.

Frank Schulte-Ladbeck TREC# 9073

How to Winterize A Home

I heard of a situation where winterizing a home was not handled properly, so I thought that I would go over some steps in this process for homeowners and investors who are selling their home, but they are not living in it.

Firstly, the goal of winterizing is to ensure that no damage should be done to your home, while it is not being used. Homes need us to live in them to perform well, and if you are not living in them, there will be problems developing, so your goal is to prevent this as much as possible.

Step 1: Turning off the water.

For most homes, there are two points where water can be shut off: at the meter; and at the entry point to the home. Just turning off the water is not enough. If you have a plumbing leak, have it repaired before you take this step. If someone comes to turn on the water, when you are not there, that leak could be a major hassle later. You want the water to drain from the pipes too, so open several faucets (usually, the one furthest from the entry point and the one closest to that point will suffice). You will also want to drain your tank for the water heater (make sure you follow the proper procedures listed on the water heater for this). You do want to keep water in the P-traps under the sinks and in the toilets. Sewer gases will come into the house, and no one will want to look at such a home.

Step 2 Turning off the electricity.

Usually there is one main switch on the main panel to accomplish this task, but if it is not there, you will have to turn off all of the power by tripping the breaker for each circuit. As with the water, make all necessary repairs before leaving the home. With many panels on the exteriors of our homes, anyone could come and turn them on. I also suggest securing these panels by padlocking them.

Step 3 Turning off the natural gas.

There is a valve to turn off the gas on the meter, but first go through the house and turn off the valves for each appliance that uses gas individually. This is important for air conditioning systems and water heaters, which may have proper shut down procedures that need to be followed.

Step 4 Close all windows, patch all holes, close all doors.

This may seem simple, but I have seen where people forgot to close a window and patch a hole in their wall. A storm came through causing rain to get into the home, causing a lot of damage. Patch all holes refers to window glass too.

Step 5 Label it.

People might not know that the house has been winterized, or what that means, so you need to inform them. Here is one of the few times where I am going to recommend duct tape; use it to tape over toilets, so they are not used. Put signs by the exterior doors mentioning that the home has been winterized. Put notes by faucets to the same intent. People will go to figure out how to turn everything on to check the house out, which can lead to problems for you. If they are there with a Realtor, this person will help them to understand the situation, but you should not take the chance.

These steps are easy enough, but I have seen owners just turn off the water and electricity, not realizing the problems that might ensue. If you are buying investment properties, an inspector can do this for you, but it is simple enough to handle on your own.

Frank Schulte-Ladbeck TREC# 9073

The Roof Covering and Roof Penetrations Part 3

Most of us looking at a roof are concerned about the roofing material. All of the protrusions do not come into our thoughts, but they are a prime area for roof leaks. Those tubes sticking up are also an important part to the function of the home.

Determining which pipe is the correct one for the application can be a little more than what can be covered here, so I wish to go over some basics of looking at these tubes and their eventual exit from the building. In the attic, you will want to check for tow things: leaks and support. The idea of the tube is to bring gas out and air in, and this function is hampered by damage pipes, which have leaks. For example, water vapor in the attic from a bathroom fan can create a great deal of damage over time. The pipes should also be secured and supported in place. Many of these pipes come in sections, which can come apart, so you will want them to stay in place. There is one type of vent that does not have any type of tube associated with it: the ridge vent or attic vent. This type of vent is meant to create air circulation in the attic.

On the roof, you need to check a few things. The housing on the roof should be in good shape. It should be secure, and the fasteners should have a roofing caulk dabbed over them to help prevent leaks. All of the vents should clear the roof. There are different height requirements for this, but most smaller vents should be at least 6” above the roof line.

These vents will also have to be examined for wildlife. A bird’s nest atop of a vent can cause real problems below. Squirrels like to use them as an entry point to the attic. Check for signs that this has been happening, because it will happen again. Your pest control firm will offer you the best options in dealing with them. I have found that removing the nests a few times will lead the birds to move on, and metal screening is needed for squirrel prevention.

I have found contractors using incorrect piping material in homes, and this is not easy to determine by an individual who has not studied this a bit. Rely on your inspector or contractor for advice here. One big problem is the bathroom vent. Many people assume that this is for odors, but it is meant for the water vapor. Because of this misaprehension, there is a lack of concern where the vent should end. Make sure that it is going to the exterior. Either through the roof or soffit. Caulking the fastener heads or around the vent is often forgotten, and it is such a simple fix to prevent leaks. Eventually, they will occur there.

Frank Schulte-Ladbeck, TREC#9073, http://www.fschulte-ladbeck.com

Real Estate Investor Tip: Serial Numbers

Since you have come to this site, you are certainly interested in finding that great investment. Going through the other advice articles here will help, and you can find some great homes listed on this site. However, I thought that I could provide you with a quick tip for those of you already looking at some homes.

So much is happening around the country with foreclosures, that you really need to know what you are buying, and if the items in the house are the ones you thought were buying are still there. There have been instances of some appliances being switched out of these homes. You will see a nicer stove, only to find a broken down unit in its place, when you have completed the deal. The easiest way to track what you are looking at is through serial numbers. Find the nameplate for the unit that you are inspecting. This unit could be a dishwasher, water heater, or part of the HVAC (air conditioning) system. On the plate, locate the serial number (abbreviated s/n), and copy it down for your notes. There will be times that you cannot find or read the serial number, so take down any identifying information that you can find. If you are using an inspector, ask them to write down this information. I include it in my reports, but this procedure has not become common practice yet.

Many foreclosures will not have an issue, but it is better to be safe in such matters. A new stove may be an expense that you did not calculate on in your determination when thinking about buying the house.

Frank Schulte-Ladbeck, TREC#9073, http://www.fschulte-ladbeck.com

The Roof Covering and Roof Penetrations Part 2

There is no way to determine if a roof leaks, unless you are in the attic while it is raining. There are indicators, which can lead you to believe that there is a problem. There are also items to check to ensure that you will not have a problem in the future, even if you do not have one going on at this moment. Finally, each roofing material has its own concerns to inspect. We will go through these points, so you could see if you need to investigate the roof further.

Signs of moisture can come from various penetration points in your home, but we frequently jump to the conclusion that it is the roof. One client called in every technician and service company that she could think of to look at her roof and systems in the attic to find where the leak was coming from. They all told her that they thought it was from the roof, but they could not pinpoint it. When I came in, I noticed that the patio had been built on top of an existing patio, so rain water seeped in through the weepholes in the brick wall. I give this example, because I want you to realize that you should not jump to conclusions with signs of water staining. It is easy to mistake condensation from water pipes in the attic for roof leaks. To really determine if it is a roof leak, you need to see a series of signs which lead to the roof. Water stains on the sheathing and rafters is an indicator. Look below these stains to see if the insulation is matted or damp. Sometimes new insulation has been added, so go down into the house, and check the area where the water stains in the attic where to find other stains here. This trail would be a good indicator of a roof leak. If you see streaks of sunlight, you can find a hole. I do not mean light coming from a vent, but rather a small hole. These could be from a nail that popped out from the flashing of a vent.

Going up to the roof, you will be able to find items that could eventually be a problem. Tree branches can rub along the surface of the roof, damaging the covering. On one foreclosure, a thick limb had torn the roof covering and sheathing off, but this was over the attached garage, and it was not repaired, since it did not effect living space. Leaves left on the roof hold moisture on the roof covering, helping to deteriorate it. These leaves become perfect homes for insects, which will also attack the roof covering. Fasteners used for attaching the satellite dish or flashing need to be covered by a roofing caulk. This is a black in color. In one instance, an installer used the caulk for the dish, but not on the fasteners for the wire clips going down the roof. This caulk should be used on exposed fasteners for the roof covering. On the ridge of the roof, the last piece of the covering will have a nail exposed in most instances, and some roofers forget to caulk that head. The fasteners will be either nails or screws.

There are five common roof types for residential properties in the Houston area: asphalt; wood; slate; clay; and metal. Flat roofs are not too common for homes. A composition shingle, also known as an asphalt shingle, is made from several layers of materials. They are offered in different thickness sizes, and sometimes have additives in them to ensure longer life. These newer thicker improved shingles are supposed to last longer than the older style, but that is yet to be seen. Composition shingles rarely last more than fifteen years in Houston’s climate. The granules on the shingle prevent it from being broken down by the sun’s ultraviolet light. If you see a lot of granules in the gutter, the shingles are starting to break down. Wood shingles last for the same amount of time as composition shingles. When you see the wood curling, or breaking easily, the shingles need to be replaced. Slate and clay tiles can be long lasting when installed properly, but both tiles are brittle. They can break in a hailstorm or when objects are hurled at them during a hurricane. These tiles will withstand the winds of a hurricane well though. It is best to inspect them from a ladder, because the tiles can break by being walked on. Metal roofs are making a comeback in rural areas, and they are being seen in urban locations too. The main problem with metal roofs cannot be easily seen. The covered fasteners will loosen during the expansion and contraction of the metal, allowing water to leak in. Manufacturers are trying to find ways to resolve this issue. For all roofs, you want to see if any of the coverings are cracking or warping. You want to look for broken pieces. There might not be a leak yet, but these are indicators that the roof should be replaced.

A good inspector or contractor can be an aid here. Once you see some signs of moisture in the house, and you cannot find where it is coming from, you will want someone familiar with different parts of the home to help you locate the source.

Frank Schulte-Ladbeck, TREC#9073, http://www.fschulte-ladbeck.com

The Roof Covering and Roof Penetrations

To have a roof above our heads is a human need. To be covered and protected from the elements is the function which the roof provides to our homes. It is a simple function really, but there are many variations on how to accomplish this feat. After creating this mantle to prevent the elements from intruding on our Sunday dinners, we cut holes into the roof for the vents needed by our equipment. It seems counter intuitive, but it is a necessary part of construction, and of our home’s systems.

A roof is easy to understand in its construction. Sheathing is placed over the framing. A material for assisting in preventing moisture penetration is placed over the sheathing. For most residential roofs, the material used will be roofing paper. Flat roofs need a membrane material to help the rain water flow away. On top of the barrier, another product will be used to help the system withstand the elements. You will typically see composite shingles filling this role. Other roof coverings can be tar with pebbles, slate, concrete, metal, plastic, clay, and wood. One of the more interesting developments is solar panel shingles. This product is installed in a similar fashion to composite shingles, so you do not see bulky solar panels. From a distance, these panels look like any dark colored roof.

The pipes coming through the roof are vents or flues for the house’s mechanical systems. Any time a piece of equipment burns natural gas to heat or power it, the exhaust gas needs to exit the building. These flues could find egress through a wall, which is fine as long as these flues do not come near a window. You also need a vent for your plumbing system. If air cannot come into the system, the water will not drain away. Think of a straw in your drink. Place your finger to cover the opening, and lift the straw out of the drink. Remove your finger to let the liquid spill out. This principle is needed for your plumbing system too. You will also produce exhaust gases from cooking and drying your clothes, which need to be vented from the home. Hot showers create water vapor that needs to be vented by the bathroom fan. Finally, a chimney could go straight through the roof, or it could be on the edge of the roof. Chimney flues that have a brick or wood covering surrounding them need a way to divert the water from the roof to the sides. A saddle (or it sometimes called a cricket) will be put on the chimney side facing the roof. This is a little bump to help force the rain water around the chimney.

The last part of the roofing system will be a method to remove the heat from the attic. Some homes use power fans, and solar powered versions of this method are now available. Most homes use a passive cooling method. Vents in the soffit draw air into the attic, and the new air pushes the air in the attic out of a vent at the ridge of the roof. These vents could be pipes, but they are usually a gap in the sheathing at the highest point of the roof (the ridge), which will be covered with the roofing shingles. Another passive method is related to a type of windmill. A roof vent in the shape of a ball formed by blades is placed through the roof. As the wind turns the blades, air is drawn into and out of the attic, but this system works better in conjunction with the soffit vents. To explain the soffit, you have part of the roof overhanging from the building. The “ceiling” under this overhang is called the soffit. Another common method to help cool the attic space, which also helps reduce the bills associated with your air conditioning, is a radiant barrier. This barrier could be a silver colored paintable product, but the more common version is a sheet applied to the sheathing. Sheathing with this material pre-attached is sold at home improvement centers. The material is basically the same product that you might use as a sun shield in your car.

Those are the basic elements, and it may seem easy, but like foundations roofs are designed to withstand the elements in your area. Snow and hurricanes have to be taken into account. Much of this planning is in the framing, but the roof itself is included in these plans. The next articles will deal with types of roofing materials, and what to look for when examining them.

(This is a roof from a rental property, which is in need of some help. The pile of leaves on the roof trap moisture and insects in that spot. Eventually, leaf piles like this could lead to problems with moisture penetration in the interior of the building. The branches coming down on the roof also assist in the deterioration of the roof covering.)

Frank Schulte-Ladbeck, TREC#9073, http://www.fschulte-ladbeck.com

Interior Walls

After going over framing and exterior walls, there really is not much to add when it comes to examining interior walls, and for that matter ceilings, but I do have a few points to make.

Most homes in the last twenty years have been covered exclusively with a product known by many names, but it is commonly referred to as drywall. Wood paneling was still common in the sixties, but in the seventies, builders started relying on drywall for interiors. To speed up installation, builders use nails to attach this product to the framing, but this causes problems. Drywall is meant to be fastened by drywall screws. Nails do not hold the material tight to the framing over time. You will see the nail pop out from the wall, or you will notice a bulge. To fix this, you can screw the proper fastener into place next to the popping nail. Cover the heads by spackling, and then paint.

Drywall spackle is sold in any home improvement store. It is easy to use, and most brands now have one color when wet, and another when dry. This makes it simple to know when you can paint over the patch. The product is good for minor holes, dents, and cracks. Cracks that are larger than a 1/8” indicate significant movement, so they should be investigated. For larger holes, there are do-it-yourselfer kits at stores that make professional looking repairs.

Drywall is the easiest to repair, but you can see other materials are used too. Most homes that are becoming available through foreclosures have been built in the last ten years, so you will have a better time when it comes to fixing them, but other wall materials frequently come in sheet material, so installation is similar to drywall.

If you notice previous repairs, you may not need to be concerned. Most damage to interior walls comes from large pieces of furniture being moved or children playing. Homeowners that do the repairs themselves do not handle the paint job well, so the repair becomes obvious. If you see signs of moisture in other places close to the repair, you will want to pay closer attention to the repair area. If there is carpet on the floor by that location, pull it up to see if the concrete underneath is discolored by water stains. If so, the wall material may have been replaced due to water damage.

There have been reports of borrowers taking it out on their homes due to the foreclosure, but most of this damage is minor if you do see it. Most of the time the damage is from doors being slammed into the wall when the door stop is broken. Once these holes are fixed, you will want to fix the door stop, or you will need a stop on the wall itself.

(Nail popping out of ceiling. You will normally see a bump, but in this case, the nail is coming out.)

Frank Schulte-Ladbeck, TREC#9073, http://www.fschulte-ladbeck.com