Webinar July 2024

[Jake Alexander]

All right, so welcome to the July webinar for Costa Rica Investments. My name is Jake Alexander. I'm one of the real estate and development specialists here joined by Alex Stripe with Stripe Signature Home Inspections.

And today we're gonna be going over home inspections in Costa Rica, understanding common issues as well as new home inspections, work and advice when investing here. If you missed our webinar last month, it was about architecture and you can find it on our YouTube channel. So like I said, today we have Alex with Stripe Signature Home Inspections.

First started doing home inspections in Denver in 2015. Alex moved down to Costa Rica in January of 2021 and then started doing home inspections down here that September. The difference with Alex is he performs inspections to US standards and has all the tools and technology that a lot of people don't, which is why we at Costa Rica Investments use them.

So Alex, welcome and thanks for joining me today.

[Alex Stripe]

Thanks Jake, I appreciate it. So yeah, I'm Alex with Stripe Signature Home Inspections. As Jake said, I started doing inspections in Denver actually in November of 2015, but I've been in the industry for years prior to that.

Started off as an insurance adjuster with Allstate on their national catastrophe team. So travel across the country, assessing damage of big storms and then was vice president of a small roofing company there in Denver before deciding to open up my own home inspection company.

[Jake Alexander]

All right, so just a couple bullet points on the agenda that we're gonna cover today. So first off, we're gonna go over why you should hire a home inspector, when you should do a home inspection, what that process looks like for hiring a home inspector, the actual home inspection process. We're also gonna go over differences between US and Costa Rica inspections, common issues that we find and then important things to do after the inspection followed by a Q and A.

If anyone has questions while we're going through the presentation, please just submit it through the question box and we'll get to it for you. So to start off with Alex, why should someone hire a home inspector?

[Alex Stripe]

Yeah, that's a good question. So when you're purchasing a home, it's important to know the true condition of the home, right? So if you wanna either negotiate for repairs or just plan to repair or upgrade as necessary, it's good to have that baseline and know exactly where you're at.

You know, like I said, sometimes we can go and we can find issues. There might be some wiggle room depending on how the contract's written so that you can negotiate with the seller to either have them make the repairs or if nothing else, you can at least get a realistic budget in mind for what it will cost to make the repairs and make them uncomfortable for you. And then once you know all the conditions up front, you have that peace of mind knowing like, hey, me or me and my family or my investment can be safe.

[Jake Alexander]

And when's a typical time that a home inspection is done?

[Alex Stripe]

Yeah, so that's a good question. It really depends on if you're buying a pre-existing home or a new build. So if you're buying a pre-existing home that's already built, I recommend that you get a schedule as early in your due diligence period as possible.

So that way, if we find issues that need to be further evaluated or you need estimates for repair, you have plenty of time to do that within your due diligence period. If it's a new build, as soon as, prior to closing, but as soon as it's completed. So this way we can make sure that we're not just calling out random cosmetic stuff if the builder's still working on it.

And then you want to get it taken care of before you move in and close.

[Jake Alexander]

And when someone's looking to hire a home inspector, what is your recommended process for that?

[Alex Stripe]

Yeah, that's a good question. So down here in particular, it's really important to vet your own home inspector. So while you may get a recommendation from a realtor or advisors like yourselves or attorneys, it's still best practice to reach out to multiple inspectors, find out what their qualifications are, ask them for sample reports, ask them what tools and technology they have.

If they have an online presence, look for reviews. If not, it's really important to try to get references. You really want to establish some sort of trust in that home inspector that they're working on your behalf and not for the agent or anybody else.

[Jake Alexander]

And when you're going through this process, are there any things that stick out as green flag or red flag, stay away from this guy?

[Alex Stripe]

Yeah, that's a good question. So the green flag is obviously experience. Have they been doing home inspections for a long period of time?

Do they have good sample reports? Are they willing to send that to you? Do they have an online presence?

So all the things that you would check would be those green flags. If they don't have an online presence or can't give you a referral, or they're super cheap and there's usually a reason for that. So it's important to know what to expect and to have some sort of sample so that you can say, if this guy's 250 and this guy's 500, what am I getting for that extra fee?

[Jake Alexander]

And what would you say is an estimate of a range of what a home inspection should cost?

[Alex Stripe]

Yeah, for a qualified inspector that has the tools, the experience, the knowledge, all of those things, I would say starting, and this is where our baseline is for apartments or condos or starting is 500 US dollars for a condo or apartment. And then for a detached single family, we're at 675. I know there's a few guys that are a little cheaper and a couple of guys that are a little higher.

So it just depends on, but I would say that that's a solid starting point here in Costa Rica.

[Jake Alexander]

Awesome, thanks.

[Alex Stripe]

Yeah.

[Jake Alexander]

And so walk me through the home inspection process. What do you do?

[Alex Stripe]

Yeah, that's a good question. So once we're hired by the client, of course we schedule the inspection. And once we're on site, we typically get started on the outside.

So we fly a drone to look at all the roofing stuff. Sometimes if it's just a single level, I'll also set up the ladder along the eaves. Typically we're not walking on the roofs here, mostly because they're clay tiles and they're gonna cause damage or they're metal and slick.

And we don't want to dent or cause damage to them as well. So really the drone is the best way to do it here. So we'll start with that and then we'll walk around the exterior.

What we're looking for is we're looking for proper drainage and grading away from the home. As you know, we get quite a bit of rain here in Costa Rica. So if it's flat grading or sloped towards the home, that water is gonna sit against the foundation and cause shifting and settling.

So we're looking for gutters and downspouts that are properly installed and run away from the home. We're trying to make sure that there's no open penetration points in the walls, that there's all the windows and doors and trim are sealed properly to keep moisture and pests out. You're looking at AC components, electrical.

Once we're in the home, of course, we're gonna open up the electrical panel, make sure all the wiring looks correct. We're gonna test all the outlets, test all the plumbing fixtures, test doors, windows, and just basically top to bottom. We're looking at everything that's safe and accessible for us.

[Jake Alexander]

And so you've done, I don't know how many inspections, but plenty of inspections in the U.S. You've done a ton down here. Tell us about the differences that you find in between the two countries and the home inspection, say home inspection process and also what you find.

[Alex Stripe]

Yeah, so the process remains fairly consistent both in the U.S. and here. Again, there we're typically starting with the roof and the exterior and working our way in. Same thing we'll do here, but the big differences are the construction materials.

So in the U.S. and probably Canada, well, definitely Canada, they do a lot of stick construction, right? So it's wood framing, drywall, house wrap, things like that. Here, we don't see a whole lot of that.

It's mostly block and concrete construction. And then one of the big differences as well is in North America, the municipality is always coming and issuing like a certificate of occupancy. They're doing final inspections.

Here, it's very rare, if it ever even happens, that a muni comes by afterwards and checks the quality. So it's one of those things that you really have to have advocates here to make sure that everything's being done properly, right? If you're building, best idea is to have your architect or engineer on site every couple of weeks to track the progress, make sure they're building to the plans.

Or if you're buying an existing home, obviously having a thorough home inspection is done there. And then one other thing that we notice here is, if there's disclosure laws, they're not enforced. And so a lot of times, there can be known issues with the home that the seller and or agent or anybody may not disclose to the potential buyer.

So again, having somebody that's qualified and experienced to help look for those clues that there may be something else going on is really important.

[Jake Alexander]

And so when you're going through these inspections, can you kind of run us down the most common issues that you're finding?

[Alex Stripe]

Yeah, so as you see here on the slide, electrical and plumbing are probably the two biggest issues that we find out here. I'm not sure, I'll say that the Costa Rica adopted the US National Electric Code, I believe it was like 2007 or sometime in the early 2000s. And so anything built after that really should be the same installation as US standards.

However, it's very rarely done here. So oftentimes we're finding the wrong size wires in the panel, so too small for the breaker that's running to no GFCIs and any other wet spaces like your kitchens, bathroom, exterior laundry. There's always exposed wires just run throughout the property.

There's hardly ever smoke alarms in the homes here. There's double taps in panels. So there's a varied variety of things that go probably not the right direction with the electrical installations here.

And then plumbing, same sort of thing. We're always missing plumbing vents. The drain materials are those flexible accordion style that are known to clogs and things like that.

You'll have like exposed pipes or they're not supported. So a lot of times you'll have like pipe bursts because they just weren't properly installed. Missing traps.

So a lot of times when you don't have the plumbing vents or the missing traps, you'll get into a home and you just get hit with a sewer gas smell. So, I mean, we've been in homes that are $1.5 million in custom home builds and you just walk in and you're just blasted with a foul smell because if it's not vented, eventually it's going to burp through the toilet or through one of the drains and the smell is not pleasant. We talked about the grading and drainage already.

So that's something that we find pretty often here where it's either missing the gutters and downspouts or it's not sloped properly away from the home. There's sometimes where there's no retaining walls or swales. So a swale is kind of a ditch kind of around the house so that slopes away.

And then if you're building on a mountain side, it's getting water collects and runs away almost like a drain type thing. And then with roofs here, you'll see missing gaskets or the wrong faster types, missing or broken titles, faded paint on the metal, just a various issue, lack of maintenance issues, basically.

[Jake Alexander]

And yeah, so I think the next part here, we just have pictures of common problems that you find.

[Alex Stripe]

I mean- Yeah, so like for instance, here you do have the rust on the roof and what happens there is, eventually that water is going to find its way in. This one also had some issues with the fasteners. They didn't have the gaskets.

And so there were actually plenty of leaks inside the home as well. Same here, you've got the unsealed seams there. And so with any sort of wind driven rain, that water is just going to rush right in.

And so it's really important that when the panels come together, that those seams are sealed. This is some of that moisture intrusion in the wall. A lot of times when they do penetrations, whether it's windows, doors, they're running the AC conduit lines or any electrical lines, they don't seal around them.

So this leaves these openings in the wall and then water gets in and eventually runs down and you get all this trap moisture in the wall there.

[Jake Alexander]

And how do you like, so when you see this, what's the next step? I mean, you can like visibly see it, but then what do you do?

[Alex Stripe]

Yeah, in this case, dealing with stuff on blocks a little bit easier to deal with. Now, if this were a wood frame and it's gotten in behind the vapor barrier, you're talking about potential mold issues inside. So that's the benefit of here.

Here, there's ways to clean this off and then reseal it, repaint it, and make sure that you seal all the penetrations so that you can avoid this from happening again. Termites are very popular here in Costa Rica, especially in jungle areas, beach towns, anywhere like that. So you can see on this one, this was actually one that we did in the Caribbean.

The termites didn't get treated and they were doing quite a bit of work there. Another thing to go without a photo, I mean, we have all kinds of pests here in Costa Rica, right? So it's, you know, we'll have bats.

So you'll get a lot of bats in the attic or on the outside and their droppings are corrosive. And so, you know, they can damage the construction materials as well. And then, you know, the termites and we're destroying insects and things.

So it's really important to always, you know, if you have pests around to come up with a good maintenance schedule of pest control and keep, protect your house that way. So this is getting into some of the electrical stuff. In this photo, this is just showing an undersized wire running to a 60 amp breaker.

And so the problem with this is that breaker is not going to trip unless there's enough current, right? So those wires are now taking too much current. And if it's not telling the breaker, hey, we're overloaded, it won't trip.

So those wires can potentially overheat and create a fire. And it's, I think a study came out a couple of years ago by the fire department here in Costa Rica that said that electrical issues are actually the number one cause of fires and structures here in Costa Rica. And with as much electrical issues that we see, you know, some things like this and double taps, you know, are currently, are definitely helping.

Here's one where, you know, it may not have caught the whole house on fire, but it definitely caught on fire inside the panel and charred that whole panel and its components. The funny one about that one is when we pointed that out, the seller was from Canada and he's like, oh, I'm an electrician in Canada, this box is fine. And so I don't think the buyer did anything, but you know, that's a red flag and no electrician should ever tell you that panel's okay.

So we use thermal imaging and it helps us find, you know, moisture issues or overheating in the panel. So you can see in the photo on the left here, that particular, you know, service feeder wire into the lug is almost at 190 degrees. And at the lowest temperature on the panel is 82 degrees.

So we've got a temperature of, you know, 112 degrees. That's a huge difference, which tells us that there's an issue going on, that that wire's, you know, overloaded, that circuit's overloaded, it's potentially overheating. So this is more of an immediate concern where we would, you know, recommend an electrician get out there as soon as possible to determine what's going on, because it's an unbalanced load or it's overheating and it needs to be addressed before it causes a fire.

And then the one on the right, you can see kind of in the background that's sustaining on the wall. It didn't really need the thermal imaging camera to tell us that there's moisture there, but it does help, you know, show it. And then we of course have various moisture meters that we put on there to verify, you know, how wet it is.

[Jake Alexander]

And so the one on the left here is that extreme of a heat difference, things that you normally find with double taps and then undersized wires as well are more common with double taps.

[Alex Stripe]

You know, honestly, we don't see the heat difference like that. A lot of times on the double taps, the issue with the double taps is that the connections could come loose because you're putting two under one lug. And so with that, it can create that overheating if it doesn't have a good connection.

And so that doesn't always cause overheating. Sometimes the undersized wire also doesn't, sometimes it doesn't need to carry that much amperage to the breaker. But in this case, I think they, it's just an unbalanced load for whatever reason.

And so that wire was working way too hard. But yeah, your typical difference is usually within a few degrees, not a hundred. Yeah.

This one's just showing those accordion style flex strains. You know, these were not approved in the States, they're not approved here. They're just very common.

You know, what happens is those things get kinked and they cause clogging, slow drains and all those things. So while they're really easy to install, it really should be a smooth wall P-trap. And a P-trap, you know, has that U shape.

It's kind of funny it's called a P-trap because it looks more like a U, but it keeps that water in there so that it keeps the sewer gases from coming back into the house.

[Jake Alexander]

And I mean, you find these, what, just because it's easier?

[Alex Stripe]

Yeah, it's easier. I don't think the P-traps are, I mean, they're certainly available here. I don't know if it's just, you know, lack of training or, you know, knowledge or just that these are easily, more easily accessible and can be, you know, bent and contorted a little bit better to fit the space.

But yeah, I mean, these are just all over the place. I mean, we find these in probably 80 to 90% of the homes that we do. Wow.

This is just an unmissed, so this is an undermount sink. And so where this glue is, there really should be a clip or a bracket because eventually that glue is going to break down. And so we've actually seen old kitchen sinks or bathroom sinks completely fall out.

So if they're not supported by a clip or a bracket, you know, over time, you know, you fill that sink and it adds all that weight, that sink's going to come down.

[Jake Alexander]

That's crazy. So after you have the inspection done, what's like the next steps in the process?

[Alex Stripe]

Yeah, so it really depends, right? So most of our clients tend to not be around for inspection. They may have come down on vacation, seen the property, or maybe have never seen it in person, scheduled the inspection.

So if that's the case, you're not able to make the inspection, we strongly encourage our clients to set up a follow-up call. We can do that via Zoom, you know, Google Meet or just WhatsApp, whatever is convenient for the client. And that way we can go through it and put the findings in perspective.

You know, home inspection reports are designed to be a list of defects or maintenance items. So they're not going to highlight the great things about the home. So when you get this report that, you know, is 40, 50 pages sometimes, and it's got a lot of photos, it can come across like, oh no, what am I buying here?

Where in reality we can say, hey, these are very common issues here in Costa Rica. They're not hard to fix. But we want you to be aware of them because they are different than what we see in North America.

So, you know, having that phone call, putting it in perspective can really help the clients, you know, understand a little better and not, you know, have a more positive outcome for it.

[Jake Alexander]

Yeah. And then just setting that expectation, like you're going to see plumbing, you're going to see electrical. If you have a metal roof, there's probably going to be gaps, probably going to be missing screws, probably going to be some rust.

And as long as you know that going into it, a little less of a surprise when we get the 50 page whammy coming at you.

[Alex Stripe]

Yeah, a hundred percent, man. And that's why I love working with you guys, right? Because you guys always do a good job of setting those expectations with your clients.

Sometimes no matter how hard we try with the realtors that we partner with, that communication is lacking. So while we explain in our emails, like, hey, you know, we find a lot of issues that are common here. These are the systems that we find the most issues with.

The realtors don't help us reinforce that sometimes. Some will do, some of them are really good at that. But it really makes a difference with how the client perceives that inspection afterwards.

If they know that these are going to come up and it's been reinforced multiple times, it's not as much of a shock to the system. It's not as scary.

[Jake Alexander]

Yeah. So if anyone has any questions, please drop it in the chat box there. And I guess, Alex, do you have any of the tools that you use when you're on inspections and maybe kind of go over those while we're seeing if any questions come in?

[Alex Stripe]

Absolutely. So I'll pull out the thermal imaging camera first. So you kind of saw some pictures of how that works, but what these do is they detect the temperature difference.

And so what we do is we try to get about a 15 degree temperature difference between the inside and outside. So we'll turn on the ACs and things like that. And then we'll scan the whole home basically and look for any anomalies.

So if we see way cooler temperature, that can be indicative of either that's where the AC is blowing and it's causing it to be colder. Or if we suspect that there's a moisture leak or water leak of some type, then we'll pull out moisture meters. This particular moisture meter is good for tile, block, stone.

You can see here, it's non-intrusive. So a lot of them have pins and I'll pull one of those out in a second. But this one's calibrated.

So the human body is made up of like 60% water or something. So you can see that it's reading quite a bit of moisture, but I don't have to stab myself to get that. So this one, I really like quite a bit.

Sometimes if it's drywall, we can use a more intrusive one and put these little pin holes in there and that'll give us a true reading as well. So then we have another one that's also just contactless that we can put on the wall. So the reason I have multiple is really just to check the tools, make sure that I'm getting accurate readings and that one's not giving me a false positive.

Other issues that are other tools that we have are just like your receptacle testers are gonna tell us if the wires of the outlet are wired correctly. And then of course, screwdrivers to open up the electrical panels, flashlights so we can see things, ladders so that we can get into an attic space if there is one. That's one of the differences that you'll see here too is in the States, we have a lot of basements or attics.

While there are attics here, a lot of times there's no hatch to get into them, to inspect them. And so we have no idea what's in there. There's hardly ever any insulation in a lot of the block construction that we've seen.

And so that's one thing that's a little bit different, but generally speaking, I haven't noticed that the lack of insulation really hurts too much.

[Jake Alexander]

And so we've got a question here from Richard. I know Costa Rica is mostly septic. Do you inspect septics and are they pretty uniform?

And what's a typical septic system like here?

[Alex Stripe]

Yeah, so that's a really good question. So I am not trained on septic inspection. So while we test all of the plumbing fixtures themselves, we'll run several fixtures at a time.

We'll make sure that they drain properly. There's no leaks. We'll look for venting, all of those things.

We don't actually have the ability to do the specific septic tank. I know that you and I have talked about this a couple of times, Jake, in the past. I don't know of any company down here that offers any sort of sewer scope or sewer camera to actually get inside the septic tank to make sure it's in good shape.

So oftentimes, the septic cleaning companies will come out and just pump it and will tell you, oh, it's good to go. Unless you can verify that there's a break or a leak somewhere, it's really hard to know for sure. So the best bet is to always get it pumped prior to closing and ask them what the maintenance schedule is because they do vary in size and things like that here.

So that's a good question.

[Jake Alexander]

All right. If anyone else has questions, we can drop them in here now. If not, say thank you, Alex, for hopping on here today.

And what we'll do is we'll drop your info in the section below the YouTube video. But also if people want to reach out to you, where can they find you?

[Alex Stripe]

Yeah, that's a good question. Thanks. They can find me on my website.

It's just www.stripeinspections.com. They can email me at alexatstripeinspections.com or they can reach out on WhatsApp or phone. All that information I'm sure will be in there in the comments and things like that on the YouTube thing.

But I'm pretty easy to find online.

[Jake Alexander]

Awesome. All right. Well, I think that's going to wrap it up again.

I'm Jake with Costa Rica Investments. If you guys have any questions, please feel free to reach out to myself, jakeatinvestingcostarica.com. You can also book a meeting with me at the link down below the YouTube video.

And for all things home inspections in Costa Rica, you've got Alex. So thanks for hopping on. And I'm sure I'll be seeing you around.

[Alex Stripe]

Yeah. Thanks, Jake. I appreciate the time.

I hope you have a good rest of your day. And thanks everybody for watching.

[Jake Alexander]

We'll see you. Thanks.