What to do?? Nervous to purchases another house

What to do?? Nervous to purchases another house

Member since 2022 · 5 posts · 0 votes

A house is asking $300,000. I got a quote that I could make $55,000+ from short term rentals from a property management company in the area. I asked for a disclosure sheet and very little information was discovered and some things contradicted each other. For example they said no pests, but selected no testing had been done, they didn't know how old the septic tank was, when it was last pumped, or the frequency, and didn't know age of roof. They purchased it back in 2020 and are already selling it. I found old photos and they did some work to the interior. 

I ran the numbers and came up with an offer price. Of course they can either say no or accept my offer, but is it worth waiving the inspection and offering asking to make $55,000+ per year not knowing full extent of damage they decided to turn the other cheek at during their own renovation?


Background: I purchased a place at asking in May, waiving inspection believing it was "turnkey" based on buyer agent and pictures. Got inspection day after closing and came up decent no big issues. But all the problems came out bigger than what the inspector suggested and I've dumped a lot of money into this terrible house. So even purchasing this current price with an inspection contingency makes me nervous because the inspector could miss things and i can get screwed again!

I'm nervous to purchase another property because my first one didn't turn out so great. What should I do?? 

Thanks for the help in advance!

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  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    4y

    @Michael Taylor


    is it worth waiving the inspection and offering asking to make $55,000+ per year not knowing full extent of damage they decided to turn the other cheek at during their own renovation?

    No

  • Member since 2022 · 5 posts · 0 votes
    4y

    @Nicholas L. Even if I get the inspection, it could come up relatively clean, and I could still get screwed over so what's the point? It could make my offer more appealing to waive the inspection. This market is still strong for cash offers and waiving inspection. So if my offer price takes into account all of money I need to spend on rehabbing it, getting the inspection wouldn't matter because I'm already assuming I'm gonna need to do a ton of work to it.

  • Rental Property Investor · Ocean Springs, MS · Member since 2022 · 349 posts · 301 votes
    4y

    You need to make an offer that reflect your expected "ton of work." But based on the information you have provided, I think it would be best to find a good, thorough inspector and not waive your inspection contingency. If it costs you the deal, no worries, move on to the next one. 

  • Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    4y
    Quote from @Michael Taylor:

    A house is asking $300,000. I got a quote that I could make $55,000+ from short term rentals from a property management company in the area. I asked for a disclosure sheet and very little information was discovered and some things contradicted each other. For example they said no pests, but selected no testing had been done, they didn't know how old the septic tank was, when it was last pumped, or the frequency, and didn't know age of roof. They purchased it back in 2020 and are already selling it. I found old photos and they did some work to the interior. 

    I ran the numbers and came up with an offer price. Of course they can either say no or accept my offer, but is it worth waiving the inspection and offering asking to make $55,000+ per year not knowing full extent of damage they decided to turn the other cheek at during their own renovation?


    Background: I purchased a place at asking in May, waiving inspection believing it was "turnkey" based on buyer agent and pictures. Got inspection day after closing and came up decent no big issues. But all the problems came out bigger than what the inspector suggested and I've dumped a lot of money into this terrible house. So even purchasing this current price with an inspection contingency makes me nervous because the inspector could miss things and i can get screwed again!

    I'm nervous to purchase another property because my first one didn't turn out so great. What should I do?? 

    Thanks for the help in advance!


     Get an inspection.

  • Member since 2019 · 6 posts · 4 votes
    4y

    First the most reliable data for STR income is STR Insights or AirDNA. You will have to pay for it but it is worth it. STR Insights is more expensive but the better of the two. Then you can use that income to calculate your offer with the Bigger Pockets Rental Tools.

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