Anyone have experience with buying a property with a POS?

Question

Hi! First time investor here looking at finding my first property. I found a few homes that looked promising at first, but they said they require a POS inspection/certification. I'm in California and looking in Ohio, and this is something I am not familiar with.  Anyone have experience with this? I'm looking to learn all I can, and appreciate any wisdom you would like to share.

Remington Lyman · Answer

Yes. They are pretty straightforward. Point of Sale (POS) inspection is required before selling a property. This helpful inspection helps ensure that the property meets local housing standards while also identifying any issues that might need to be fixed. Before you enter into a sales agreement, the seller must securely obtain a Certificate of Inspection and share it with the buyer. A lot of times the seller does not do that which can delay the deal or kill if it is more than you expected to take on.

Nicholas L. · Answer

@Lara Gott

if you are truly interested in buying OOS, i'd strongly encourage you to go to your chosen market in person, ideally multiple times, and build a team and look at properties in person before you try to buy anything.  the market is tough right now, and if you try to do everything from you're computer, you're likely to buy a lemon and lose money.  and if you can't or don't have time to go there in person... i'd reconsider investing OOS.

not trying to be discouraging - just realistic.  see these threads.

tenants breaking leases and excessive damage make it hard to be profitable

Memphis Turnkey Tenant Turnover Costs

Sell at a loss or rent at a losshttps://www.biggerpockets.com/forums/963/topics/1195280-expe...

https://www.biggerpockets.com/forums/48/topics/1160450-run-i...

https://www.biggerpockets.com/forums/48/topics/1137397-balti...

https://www.biggerpockets.com/forums/52/topics/1010977-12-00...

Account Closed · Answer

Yes the piece of sh*t (POS) inspection is very common in Ohio. You get the POS $52,000 property inspected and despite the water damage, peeling lead paint, and D class area, you buy it anyways.

Gladimir Lobo · Answer

POS’ are like the ultimate real estate obstacle course. It's a fantastic way to eliminate the competition. In Cleveland, the low entry cost of housing means there's a ton of competition. But when the city requires you to put a large amount into escrow for POS, it's like a magic trick: all the wannabe investors disappear! If you have cash, real cash, it's not a big deal. It's a great way to weed out the pretenders so the real investors can swoop in. Now, if you're short on cash, POS can be a real headache. You've got to scrape up the money for the POS, pay a deposit to a contractor who wants to perform work, and all the while, the city is holding onto your money like it's their favorite toy. So, if you're cash-strapped, yeah, POS is a serious problem. But if you've got the cash, what's the big deal, right? It's just another hurdle to jump over in the wild world of real estate investing!

Min Zhang · Answer

Hey Lara! It is a requirement in some areas in Cuyahoga County for property owners to have their property inspected before they sell it. The POS inspection ensures that the property complies with local building and safety codes. If the property has any violations, the seller must correct them before the sale can be completed or buyer to assume these violations and correct it after closing. It’s a way for the city to ensure that homes are safe and up to code before changing hands. Hope this helps!

Joshua Janus · Answer

It's an annoying up front cost to buying in the nicer areas in Cleveland. Once you clear the violations you will be able to (1) rent these houses faster with higher rental rates (2) the streets are the cleanest here with the best curb appeal (3) take advantage of short term or mid term opportunities.

Patrick Drury · Answer

@Lara GottAside from it being a city inspection, the most important thing to keep in mind is depending on the Municipality, they have escrow requirements for the POS. The escrow requirements will affect you as a buyer if you have to assume the POS. It's pretty standard that the buyer assumes the POS. Typically, the seller isn't going to deliver it POS complaint unless it's selling for a higher price on the market. Just make sure to include a contingency in your offers in these areas if you don't receive a copy of the POS report prior to submitting the offer, and you're assuming the POS so you don't get stuck losing EMD because the POS comes back higher than you can afford

Samuel Diouf · Answer

Hey Lara, as long as you have the right guidance and know what you're getting into the POS is something you can navigate through fairly easy.

Also, not every municipality in Cleveland has a POS. I'd be glad to share a sheet I've created of all municipalities that require a POS inspection.

Anyone have experience with buying a property with a POS?

Anyone have experience with buying a property with a POS?

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