Hey Sterling, Great tips. The last one is easily forgotten. I worked on an apartment deal earlier in the year and of course the inspections took all day. Did you try to renegotiate price with the seller in light of the roof repairs?

What price was the seller asking?

Could’ve mentioned more about this deal. Seems there was more to be said

Thank you Sterling! Great tips as usual! Always love reading your articles here in BP! I also like that you mention bringing a snack as it’s easy to be all about business or numbers and you forget to take care of yourself.

Pretty strange reason to pass up on a deal…just the roof? Could the purchase price not have been negotiated to where it makes sense? How’s the location? CAP? Thanks,

Sellers that don’t work with you on reasonable requests such as taking care of deferred maintenance on a huge cap ex item like roof replacement is a big reason to walk. I’ve done the exact same thing on a multi fam where the seller was not willing to lower purch price or take care of the 40-year roof. Oh well, onward and up! Thanks for sharing!

If the Seller refused to replace the rooves for 18 years, there’s a good chance they cut corners on other necessary repairs or improvements. I wouldn’t buy it even if he were negotiable on the price.

Great advice, thank you Sterling for sharing! I also like point number four. It takes careful discipline to stick by your investment criteria and pass on deals that don’t make the cut.

This is a great point. I passed on an opportunity with a property that I had known well for a long time, and would loved to have taken forward as a profit enterprise. But I also knew well that the seller had deferred maintenance on absolutely everything. What she had been forced to replace over the years she did on the cheap. She didn’t face up to the effect on the property value then, or when she was selling.

Sterling, thank you for your video. There is a property that I really want to purchase. the seller is (HUD-Regional Housing Authority). I had an appraisal done to try and make a better decision about the purchase. The appraisal cited many things that was wrong with the property, but the final appraisal was based upon the After repair value (ARV), which was basically the same amount as the purchase amount the seller is asking for. I don’t know much about real-estate and I feel so helpless because the neighborhood is not that good, most of the homes are vandalized, yet the appraisal cited none of those properties as comparisons, but found homes that had sold (in other areas) after being fully repaired and used those as comparators. I have another property on the same street where I raised my children and a vacant lot that I purchased from the State and really wanted the property I am talking about. But, listening to your article, I understand that sometimes you have to “walk away.” To purchase and fix the property would nearly wipe out my budget. The seller is convinced that his Executive Director will take nothing much less than the asking price and I know in that neighborhood, I would never be able to recoup my money. My heart is broken and I am disappointed with the appraisal because I know its not worth the dollar amount that’s on that paper, let alone the hidden costs of repairs that I can’t see. Anyway, thanks for the video.

Hi Sterling, I have a quick question about this. Since you found this out during your due-diligence, this deal mean you lose the money for inspection as well as any earnest money you put up? I’m not sure. I’m asking I guess. I’m guessing you do lose something. It’s not completely free to walk away. Correct? If so, how do you avoid this going forward? I can imagine that the cost to walking away from a deal can also add up overtime. Though, I do understand that in this case, there was no other option.

Bring a snack?? I would suggest a video camera to take a video as you’re walking the property. When you enter a unit, say out loud the unit number so you know which one you’re looking at when you go back to review it.

Sorry to ask this question here but how do I upload a profile picture?