Updated almost 8 years ago on . Most recent reply
Found more repairs than expected during inspection - Fresno, CA
I am currently near the end of escrow for a triplex in Fresno, CA (Oleander Ave and Trinity St). The plan is to fix it up, live in one of the units, and rent out the other two. Through inspections, I found that it needs much more repairs than I had originally expected.
Current Purchase Price: $188,000
Total Expected Monthly Rent: $2,100
It is a 1925 triplex that needs (to name a few):
- Foundation work (post and pier, $11k worth of work)
- Roof replacement ($11k worth of work)
- Electric that needs to be brought up to code (still has knob and tube wiring, etc.)
- Termite treatment
- 1 dysfunctional water heater
According to contractor bids, there is at least $45k worth of repairs. I have a $20k budget for repairs. My lender would allow me to use an FHA 203k loan, instead of the normal FHA loan I originally planned on using. I still can renegotiate with the seller, as my offer is contingent on the inspection and appraisal.
Does anyone have advice that could help me decide whether I should go through with this deal, or back out of the deal and wait for something that needs less repairs? Any feedback is helpful.
Most Popular Reply
@Justin Yurong You mentioned you're near the end of escrow, but typically inspection is usually the first contingency released. You haven't released it? If not, you can still go back to the seller and request those items be repaired, or more likely, a credit at closing for the repairs.
If the seller won't offer a credit or repair it, certainly consider backing out.