Cast Iron Plumbing
Good evening all!
I've been a long time listener to the podcast and member of BiggerPockets, but first time posting (and really need some advice). My wife are small time investors while we both work in the medical field. We have three single family homes currently rented and another flipper on the market.
Were currently under contract on a 4/2 house in a B- neighborhood. Our $175k offer was accepted (list price $189k) last week and currently in our option period until Friday (2/3/23). The home was built in the 1960s and like most older homes in South Texas do, it had foundations issues. This was releveled last October and currently under warranty regardless of ownership. The house is very outdated and needs some cosmetic work, but should still get around $1600-$1800 in rent per month. Honestly, I think the ARV is roughly $230-$240k. Our inspector notified us about the cast iron (nonpressurized) plumbing and recommended getting a plumber to do a "fill test" to see if the pipes were cracked. This failed miserably. Two quotes are right around $30k to reroute the drains for bathrooms, kitchen, etc under the slab.
My wife and I were about to pull the plug when the seller said they would just drop the sales price to $145k to offset the difference. I was excited to hear but my wife is more apprehensive about other looming problems and how are finances were just dumped into a flip house with the market slowing down; can't blame her.
What would you do? Thank you very much for any and all comments!
First off great job in doing your due diligence!! Many people would have missed that and just moved forward with the purchase.
There are a lot of things to consider here and would take a while to write out. Would be happy to discuss more if you are interested. DM me if you would like.
Offer $125K. You're receiving no credit for the hassle of the reroute and the acceptance of other risks associated with same. And the seller will have to find another buyer who is willing to accept this same risk if you decide to walk. We just completed reroutes on 2 houses and there are always surprises.
Quote from @Guy Gimenez:
Offer $125K. You're receiving no credit for the hassle of the reroute and the acceptance of other risks associated with same. And the seller will have to find another buyer who is willing to accept this same risk if you decide to walk. We just completed reroutes on 2 houses and there are always surprises.
Thank you for the input! I think we'll do something of the sort and see if they bite. It's definitely been a learning experience
Quote from @Guy Gimenez:
Offer $125K. You're receiving no credit for the hassle of the reroute and the acceptance of other risks associated with same. And the seller will have to find another buyer who is willing to accept this same risk if you decide to walk. We just completed reroutes on 2 houses and there are always surprises.
What did those two reroutes each cost at the end of the day (excluding carrying costs) and how long did each take?
Cost was $10K and $6K respectively. One took 3 days and the other took 2 days. Cost will be location dependent.
Quote from @Guy Gimenez:Were you gutting the house anyways or does that include putting the walls/flooring/shower back?
Cost was $10K and $6K respectively. One took 3 days and the other took 2 days. Cost will be location dependent.