Investor · Tampa FL, USA · Member since 2019 · 72 posts · 20 votes
Real quick and easy here. What would be a reason for you to back out of a deal during due diligence? Example: Foundation issues, electrical, plumbing, crazy neighbors, etc. What’s the line you aren’t willing to cross when it comes to buying a property?
Flipper/Rehabber · Denver, CO · Member since 2009 · 1k+ posts · 726 votes
6y
Nicholas,
As they say "price cures all", any of those issues can be dealt with at the right price. I mean, the house could be so bad that it needs to be torn down, but if the seller is selling the property for land value, you could knock down the house and build a new one for the right price.
Typically, for me, it comes down to condition vs price, and the seller not accepting a lower price to account for the things found during due diligence.
There of course are other specific examples, like buying a condo or townhome only to find out there is a special HOA assessment coming for $50,000 per unit, etc.
Rental Property Investor · Los Angeles · Member since 2020 · 27 posts · 7 votes
6y
Great question! Many of these issues translate to a certain cost. For a majority of the issues, it would simply be if something makes the deal not financially sound anymore. Huge headaches like crazy neighbors or title problems that waste lots of time would probably be high on the list as well. I'm eager to see what other people write!
Flipper/Rehabber · Denver, CO · Member since 2009 · 1k+ posts · 726 votes
6y
Nicholas,
As they say "price cures all", any of those issues can be dealt with at the right price. I mean, the house could be so bad that it needs to be torn down, but if the seller is selling the property for land value, you could knock down the house and build a new one for the right price.
Typically, for me, it comes down to condition vs price, and the seller not accepting a lower price to account for the things found during due diligence.
There of course are other specific examples, like buying a condo or townhome only to find out there is a special HOA assessment coming for $50,000 per unit, etc.
Would you accept a top of the market property that needs foundation work?
Thats a tough one for sure... the answer is "it really depends". Depends on how much work is needed, if its reparable, etc. Is the current price at the top of the market/neighborhood? In a neighborhood where houses top out at $300,000, this one with foundation problems is $300,000?
Real Estate Agent · Post Falls, ID · Member since 2016 · 1k+ posts · 1k+ votes
6y
@Nicholas Glatter - Usually if there are foundation issues or anything that jeopardizes the safety of the tenants, I am out. Unless of course, the sellers are willing to fix it or reduce the price enough for me to fix it.