I’m a beginner in real estate investing. I am focused on single family home rental.
The house that i am looking into buying is in centerpoint alabama and purchase price at $100k.
The major concern that i am having are:
The roof is at end of life.
floor joist needs to be install due to flooring bad deflection
There are broken cement at the patio / deck
Possible water leak to the basement walls.
i just don’t want to be the person who ends up with the expenses the previous owner should be taking care of.
Can you give an advice on how to deal with this property?
Or should i just take a pass and move on?
I highly appreciate you’re feedback.
Thank you
You calculate how much it will cost to fix the problems, and then include those costs when calculating your purchase price. the numbers either work, or they don't.
You calculate how much it will cost to fix the problems, and then include those costs when calculating your purchase price. the numbers either work, or they don't.
This is not a beginner's ideal first property. You might not want to cut your teeth on an SFR with this many problems. None of it is insurmountable if the price is right, but all of it together isn't going to help you. Especially if this is an out-of-state buy, I'd take a pass. You probably don't have the team to deal with this property and it won't be easy to find a good GC in mid-October all set to manage a project of this size.
@Jim K.
Thanks jim, i don’t have a team nor any contact out there. This is an out of state buy. Thank you for the insight.
@andrew: the numbers don’t workout as well anymore.
Tim, I am a local buy-and-hold DIY landlord and home improvement contractor in Western PA. If you'd like to go over this point-by-point as a buy-and-hold repair scenario for the experience, send me a PM with the address so I can check out the listing in Zillow and we'll do it as an exercise. If you feel comfortable enough rejecting this offer completely and doing it in public, post the address here as a starting point. I'll need plenty of additional information, but I suspect this place would be a quality exercise and/or a worthwhile thread for the community if we did it right. I did one of these a while back with a multifamily in Massachusetts and it got a lot of positive feedback.
@Jim K. I sent you a “connect” request that way i can PM you. I’m not ready to make this public but I’m interested in learning the ropes of real estate.
I highly appreciate your help
According to the inspector, the roof needs to be changed out soon because the shingles are cracked, some spots are showing the foundation that it is glued onto. He also said that the cracks and exposed bricks are signs of wear and tear and that water, and sunlight can penetrate and loosen up the glue. The age of the shingle roof is 20 years ++ and it might last another year or two depending how bad the weather gets.
The contractor (sellers contractor) says they will issue a letter that the roof have atleast 5 years life remaining.
*****
Does the letter mean that if the roof doesn't last, that the seller will cover the cost of the roof and the damages that it might incur?
5 years isn't much for roofing, (unless i'm wrong) plus it would extend my ROI for atleast another 5 years.
I value the inspectors work and insight it's his profession for the last 20 years or more, and he's not biased and no conflict of interest on the property.
It's a good location but the numbers are not going to work for me, if I have to replace the roof in a few years. I'm leaning on walking away.
@Tim Siocheng - I'd consider that promise from the seller's contractor about the longevity of the roof to be completely worthless. If the roof lasts for 3 years, and you called them to get them to squeeze another two years out of the roof, they'd laugh so hard you'd be able to hear it from a state away.
Assume the roof is toast and see if you can make your investment hypothesis work anyway. If you can't, move on to greener pastures.