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Forums » Rehabbing and House Flipping » Another issue for my first flip

Another issue for my first flip Subscribe to Another issue for my first flip

15 posts by 9 users

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Dear all, we just finished all the remodeling, and my listing agent just have a termite company did a termite inspection. that is the nightmare, the termite inspector told me that we need to break up the kitchen tiles to replace couple of rotted wood which we didn't discovered.

will this re-inspection report kill my deal? I am having very low margin on this property due to over remodeling.
and what is the best options for me now? the staging furnitures are at the property already, and I signed the contract agree not doing any work after the property is staged.


SFR Investor · Rancho Cucamonga, California


You can refuse to do the termite work and make it the buyers responsibility. Depending on how anxious the buyer is, in some scenarios they don't care. Or you can fix it as part of closing?

Unfortunately, in most cases "cheaping out" on doing things because of a "low-margin" is probably going to cost you more money then you will save.


Rehabber · Santa Clarita, California


Steve's idea will likely not fly as the end buyer likely has a lender and lenders will not usually loan without a clean termite report.

You have just learned another valuable and costly lesson taht $95 could have saved you. Get a termite inspection during your purchase process so you know what issues are there and can handle them during your rehab.

Since you are, where you are and the problem is only in one spot (as indictaed by your post) use plastic to seal off the kitchen, chip up the tiles, replace the bad wood beams in teh subfloor, and replace the tiles. From your description, I can assume that this is an elevated foundation. The other option may be to work from underneath the home (although very difficult).

As to your contract with teh home stager, you have two options:
1. Ask them and get permission, describing the small amount of work that will be done and tha erea will be sealed off during the work performed.
2. Seal of teh area, get it done, and don't tell the company and you will be liable for any damage done to their property. If you are willing to take on that liability, then you may go that route, otherwise, you will need to get permission or have them romove their property, do the work, then pay to have them bring it back.

Small_barnardenterprisesWill Barnard, Barnard Enterprises, Inc.
E-Mail: info@barnardenterprises.com
Website: http://www.barnardenterprises.com
info@barnardenterprises.com



I did the termite inspection, but that area was inaccessible, and we have digged out all the dirt, so now the inspector can access it. We have done the termite treatment which the termite company put chemical to the ground.

My big question is, will this affect the property value a lot? and how many percentage of the bank will finance a property with no termite clearance with with termite work completion?

The property is at $300k range, do you think I should also do an general home inspection?



Will, the staging company is very strict on this. I might not be able to do it. my only option is to do it outside or leave it.


Carpenter · New Durham, New Hampshire


You might want to do it from underneath anyway if you can squeeze some access. The structural repairs are inexpensive. The money comes in repairing the finishes such as flooring. You might be able to remove the damaged parts or just sister them. Remove all that you can.

At any rate, you will want to get estimates so that you can put a value on the extent of the damage. This will give you a real idea of what the cost is. Remember that this is the type of project where there can be widely varying pricing so in this case you want to get estimates with details.

Good luck,
Darrell



Darrell, I will have my contractor to come back to do the structural repair. I am hoping I can do it underneath or break the stucco on the outside walls. I think learned the lesson on this first flip.


Rehabber · Santa Clarita, California


Chelsey, found the sound of it (correct me if I am wrong) you have encountered subterranean termites and the wood underneath must have been touching soil at some point for these termites to infest the wood.

Sounds like this can in fact be treated and resolved underneath without doing any work in the interior. I suggest you have the work completed so that you can get a clean termite report for your end buyer.

Small_barnardenterprisesWill Barnard, Barnard Enterprises, Inc.
E-Mail: info@barnardenterprises.com
Website: http://www.barnardenterprises.com
info@barnardenterprises.com



Dear Will, the termite company suggested to open up from the floor to fix the damage wood at the crawlspace, that means we might not have enough room to fix it underneath. My listing agent suggested to just leave it. I am kind not feeling not comfortable with it. the re-inspection report indicated $4900 termite.


Real Estate Investor · Atlanta, Georgia


First, even if you don't fix it, you will be required to disclose the damage to the potential buyer (as will your agent). The buyer will most likely require you to fix the damage, plus it will hurt your reputation that you didn't just fix it in the first place. Based on that, it's probably better to just fix it upfront.

As for how it's fixed, leave that up to a qualified contractor, not the termite company. A good contractor may have better and/or more efficient ideas on how to do the repairs; get a couple bids.

What does, "the re-inspection report indicated $4900 termite" mean?

J Scott, Lish Properties, LLC
Telephone: 770-906-6358
Website: http://www.123flip.com
http://www.123flip.com


Real Estate Investor · Charlotte, North Carolina


As others have said, this should be able to be fixed from underneath the house... You may need to dig out a little more dirt... Make sure you're not hitting utility lines underground...get a few quotes from framers... Some will say to do it from above bc they want a bigger job fixing the tile as well... Also some may not want to go underneath bc it's dirty, tough work with not a lot of space...call a few different contractors and someone may be willing to work hard... My framers almost always fix foundations from beneath


Rehabber · Fort Myers, Florida


There is a number of ways you can address this situation.

Updated: 10:43AM, 11/04/2011

First I would address the situation with your staging co. I would contact them and explain that the unforeseen condition must be repaired to provide a safe structure during showings. Should the Co. deny your request then ask them if they are willing to as

Updated: 04:35PM, 11/05/2011

First I would address the situation with your staging co. I would contact them and explain that the unforeseen condition must be repaired to provide a safe structure during showings. Should the Co. deny your request then ask them if they are willing to as


Rehabber · Santa Clarita, California


Know that termite companies charge very high rates for repairs on termite work, mainly for two reasons: 1. They are responsible if anything gets re-infested if they do the work wo they insure themselves by charging high rates 2. They are not contractors so they sub contractor work out, they only do the pesticide/insecticide treatments so the rates are much higher than you can do.

I see many termite reports showing some very minor drywrot damage and bids of $900 to fix it, yet it costs me less than $100 to fix it. Keep that in mind, your contractors will not be charging you (at least they better not) $4900 for this work.

Small_barnardenterprisesWill Barnard, Barnard Enterprises, Inc.
E-Mail: info@barnardenterprises.com
Website: http://www.barnardenterprises.com
info@barnardenterprises.com


Real Estate Investor · Wheat Ridge, Colorado


Scott, if you have advise for Chelsy, please post it here for everyone's benefit.

Small_flying-phoenixJon Holdman, Flying Phoenix LLC


Real Estate Investor · Salt Lake C[ty, Utah


Look for a new staging company. I only pay mine if the house sells, no way they get a free ride on my dime.

Brokers only get paid when it's sold and stagers are just another member of the marketing team, make them put their money where their mouth is when they are telling you how quickly it will sell and how much more it will sell for. And an investor,or broker, is not a one time customer.

And if they are going to be jerks after being informed of the situation then they go into my people not do business with binder and I let others review it along with my OK to do business with binder. Funny, they always look at the do not do business binder first.




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