Buying your first home is a huge step into building wealth. One of the best pieces of advice, is to try to get into real estate as soon as it’s comfortable financially. Paying rent is really paying someone else’s mortgage, or giving someone else income.
Getting into San Diego real estate is no joke, it’s expensive! Sometimes forcing a purchase can be a decision that causes a lot of stress. However, once you are financially comfortable with the downpayment and monthly payments, here are a few great tips for making the most out of your first investment.
- Buy the most run down house in the best school district you can find.
- Find out how many creeps and/or troublesome neighbors are in the neighborhood.
- Find out how many neighbors graduated from college and how many were given their properties by parents. Generally neighbors with college degrees are easier to coexist with while those without are not and their kids turn into nightmares.
- Demand to inspect behind the dishwasher and under the kitchen/bathroom sinks. Have somebody pull out the dishwasher to do so. Do the same thing behind the washer/drier. You WILL find water damage there and often termite activity. Termites love wet/moiste wood.
- Crawl every inch of under the those houses which have raised foundations to inspect:
- Foundation integrity – it may have or is or will be settling throwing off the levelness of floors.
- Inspect all sewer lines
- If they are cast iron and over 40 years old, they will fail soon after you buy the place. Especially the linesfrom the laundry room/kitchen to the street. Detergents used over this many years eat cast iron pipes. Insurance companies will not pay for the mess under the house broken pipes create if the cast iron is over 40 years old because they are expected to fail after 40 years. Hiring a clean up company to suck out the sewage affluent of broken pipes from under your house can cost – at minimum – $5k.
- If the house has settled, all of the sewer lines will be off kilter – some even running up hill which will create clogs/backup.
- Houses in the east bay have been built on expansive soil. Research this issue and its effects on foundations.
- Check for water damage to the wood piers caused by standing water which may only appear during winter months. You will not see such water if the house is bought in the summer.
- Check directly under showers/bathtubs for water damage caused by leaks. If there are any leaks, check for termite damage especially if they are around the perimeter of the house where bug access is usually initially made.
- Check area under the water heater where it may have or had leaks over the years. Check for termite activity.
- BTW, water heaters only last 10 years. Its installation date should be found on it. If its old, you will be replacing it soon ($1200). Be sure it has an earthquake strap on it.
- If the house has copper water lines – good. If they are galvanized pipe – bad. Galvanized get clogged over time and the hole house has to be re-pipped. If they are galvanized, turn on the showers and check the flow rate. This will indicate how much clogging has already occurred. It will give you some idea of how much time you will have to re-pipe the place after you buy it.
- Is the house electrical wiring is copper – good. If aluminium – bad. Aluminium wiring has been known to cause house fires as it gets older.
- Check all outlets in every room using a small electrical appliance (drill, light, fan) to make sure they are all connected. If they don’t work turn on/off the wall switches in the room. If all still do not work, have the seller fix them.
- Take note of the electrical sockets near sinks. They should be GFCI protected. (Ground Fault Circuit Interrupter)
- Check for disconnected, rotted or broken force air heater ducts/tubes (both under the house and in the attic). In some of the older homes, they are wrapped in asbestos material. If you ever replace your furnace (something usually done every 15 years) you will have to pay a haz-mat team $$$ to remove that material before the new furnace can be installed. This will happen during the winter while your family freezes because the furnace is down. It represents a “surprise” expense on top of the “surprise” expense of the furnace going down. Have the seller replace it or compensate you for it.
- Check that there are no electrical or phone lines drooping down from the sub-floor which could/would come into contact with dirt or standing water (should some ever appear).
- Be sure to have the seller remove any wood scraps from under they house which are in contact with the dirt. It turns into termite bait in the winter when things become moist.
- Fill all kitchen/bathroom sinks with water and notice how fast they drain. If slow, there are problems in the sewer lines. Roto-rotor might fix this but if the foundation has settled see 4.b.ii above.
- Crawl around the attic area (on a cool day, or at night, so you can take your time without getting too hot).
- Check for water marks on the roofing plywood or slats which indicate leaks. Again, you may be buying in the summer – when its not raining.
- Check for leaks around where plumbing vent pipe protrude through the roof to the outside air.
- Look for illegal, hazardous, or dangerous wiring improvisations made by the current/previous owners.
- Look for pest infestations: Bees, wasps, termites, raccoons, squirrel, rat, snake – seen em all.
- Make sure all kitchen/bathroom fan vents work.
- Check to see if the whole attic area has been insulated and how thoroughly. If done partially have the seller finish the job. Many places in the attic may not be easily accessible or hard to see. The company who did the insulation may have cut corners.
- Inspect the fuse box coming in from the city line. If something looks fishy – big red flag.
- Look for wet spots in the dirt around the circumference of the foundation. These could be leaks in the sewer/water line going to/from the exterior of the house.
- Make sure the phone jacks in every room work, using an old analog phone. You should you get a dial tone without “crackle” noise. If such noise is audible have the owner fix it.
- After you buy a house and do improvements:
- ALWAYS have your work permitted by the city.
- The city inspectors are your friends. They look at work done by which ever contractor you hire and can tell instantly if it is done correctly.
- If you do the work yourself, they give you very helpful advise on how to perform the job as inexpensively as possible. Again they are not out to “GET” you. They just want to make sure that the community you’ve bought your house in is safe by making sure your house is safe. This makes your community more desirable than the next – increasing its resale value. Look at Palo Alto, where all work is permitted, vs East Palo Alto where it is not.
- Sure they (the city building inspection department) charge a fee but their experience is invaluable and when you sell the place, permitted work will guarantee you do not get sued later on if the house burns down, falls apart in the next earthquake, or people are injured through faulty workmanship.
- Getting a permit is VERY cheap insurance.
- ALWAYS have your work permitted by the city.
If you pay a home inspector to do the above you will be robed. They are a joke. They don’t care if they do a good job or not. They will just take your money and run.
As for answering your question: Where did I get the bulk of my info from?
Answer: Learned it all the hard way. I have owned many houses.
There are a lot of other things to look for but the above are the simple/easy ones to check.