diff --git a/src/endpoint/routes.js b/src/endpoint/routes.js
index 9e851c7b..9488afec 100644
--- a/src/endpoint/routes.js
+++ b/src/endpoint/routes.js
@@ -63,8 +63,8 @@ module.exports = (server) => {
         if (err) {
           return reply(boom.badRequest(err))
         }
-
         const id = hat()
+        const initialized = ipfsd.initialized
         nodes[id] = ipfsd
 
         let api = null
@@ -80,7 +80,7 @@ module.exports = (server) => {
           }
         }
 
-        reply({ id: id, api: api })
+        reply({ id: id, api: api, initialized: initialized })
       })
     }
   })
diff --git a/src/factory-client.js b/src/factory-client.js
index e3c31f1e..186f37eb 100644
--- a/src/factory-client.js
+++ b/src/factory-client.js
@@ -95,7 +95,13 @@ class FactoryClient {
         const apiAddr = res.body.api ? res.body.api.apiAddr : ''
         const gatewayAddr = res.body.api ? res.body.api.gatewayAddr : ''
 
-        const ipfsd = new DaemonClient(this.baseUrl, res.body.id, apiAddr, gatewayAddr)
+        const ipfsd = new DaemonClient(
+          this.baseUrl,
+          res.body.id,
+          res.body.initialized,
+          apiAddr,
+          gatewayAddr
+        )
 
         callback(null, ipfsd)
       })
diff --git a/src/factory-in-proc.js b/src/factory-in-proc.js
index d844a3ca..1a3e897d 100644
--- a/src/factory-in-proc.js
+++ b/src/factory-in-proc.js
@@ -128,16 +128,22 @@ class FactoryInProc {
     }
 
     const node = new Node(options)
-    node.once('ready', () => {
-      series([
-        (cb) => options.init
-          ? node.init(cb)
-          : cb(),
-        (cb) => options.start
-          ? node.start(options.args, cb)
-          : cb()
-      ], (err) => callback(err, node))
-    })
+
+    series([
+      (cb) => node.once('ready', cb),
+      (cb) => node.repo._isInitialized(err => {
+        // if err exists, repo failed to find config or the ipfs-repo package
+        // version is different than that of the existing repo.
+        node.initialized = !err
+        cb()
+      }),
+      (cb) => options.init
+        ? node.init(cb)
+        : cb(),
+      (cb) => options.start
+        ? node.start(options.args, cb)
+        : cb()
+    ], (err) => callback(err, node))
   }
 }
 
diff --git a/src/ipfsd-client.js b/src/ipfsd-client.js
index b58c835d..930b43c7 100644
--- a/src/ipfsd-client.js
+++ b/src/ipfsd-client.js
@@ -21,12 +21,12 @@ function createApi (apiAddr, gwAddr) {
 }
 
 class DaemonClient {
-  constructor (baseUrl, _id, apiAddr, gwAddrs) {
+  constructor (baseUrl, _id, initialized, apiAddr, gwAddrs) {
     this.baseUrl = baseUrl
     this._id = _id
     this._apiAddr = multiaddr(apiAddr)
     this._gwAddr = multiaddr(gwAddrs)
-    this.initialized = false
+    this.initialized = initialized
     this.started = false
     this.api = createApi(apiAddr, gwAddrs)
   }
diff --git a/src/ipfsd-daemon.js b/src/ipfsd-daemon.js
index 6b8c1762..8a44a591 100644
--- a/src/ipfsd-daemon.js
+++ b/src/ipfsd-daemon.js
@@ -52,7 +52,7 @@ class Daemon {
     this.disposable = this.opts.disposable
     this.exec = this.opts.exec || process.env.IPFS_EXEC || findIpfsExecutable(this.opts.type, rootPath)
     this.subprocess = null
-    this.initialized = fs.existsSync(path)
+    this.initialized = fs.existsSync(this.path)
     this.clean = true
     this._apiAddr = null
     this._gatewayAddr = null
diff --git a/src/ipfsd-in-proc.js b/src/ipfsd-in-proc.js
index 8103833b..f3f37173 100644
--- a/src/ipfsd-in-proc.js
+++ b/src/ipfsd-in-proc.js
@@ -37,7 +37,6 @@ class Node extends EventEmitter {
     this._apiAddr = null
     this._gatewayAddr = null
     this._started = false
-    this.initialized = false
     this.api = null
     this.bits = this.opts.initOptions ? this.opts.initOptions.bits : null
 
@@ -155,7 +154,7 @@ class Node extends EventEmitter {
         (cb) => this.getConfig(cb),
         (conf, cb) => this.replaceConfig(defaults({}, this.opts.config, conf), cb)
       ], (err) => {
-        if (err) { return callback }
+        if (err) { return callback(err) }
         self.clean = false
         self.initialized = true
         return callback()
diff --git a/test/spawn-options.spec.js b/test/spawn-options.spec.js
index 6f56be4c..7cb3c0f8 100644
--- a/test/spawn-options.spec.js
+++ b/test/spawn-options.spec.js
@@ -79,6 +79,7 @@ describe('Spawn options', function () {
             expect(err).to.not.exist()
             expect(_ipfsd).to.exist()
             expect(_ipfsd.api).to.not.exist()
+            expect(_ipfsd.initialized).to.eql(false)
 
             ipfsd = _ipfsd
             repoPath = _ipfsd.repoPath
@@ -114,12 +115,7 @@ describe('Spawn options', function () {
         })
       })
 
-      describe('spawn from a initialized repo', () => {
-        // TODO: figure out why `proc` IPFS refuses
-        // to start with a provided repo
-        // `Error: Not able to start from state: uninitalized`
-        if (fOpts.type === 'proc') { return }
-
+      describe('spawn from an initialized repo', () => {
         let ipfsd
 
         it('f.spawn', function (done) {
@@ -135,9 +131,12 @@ describe('Spawn options', function () {
           f.spawn(options, (err, _ipfsd) => {
             expect(err).to.not.exist()
             expect(_ipfsd).to.exist()
-            expect(_ipfsd.api).to.not.exist()
 
             ipfsd = _ipfsd
+
+            expect(ipfsd.api).to.not.exist()
+            expect(ipfsd.initialized).to.eql(true)
+
             done()
           })
         })