Trying to buy my first SFM to make a rental. I'd appreciate any advice the BP community can offer.
Today was the inspection on my accepted offer . . . and guess what lovely surprises I had? Topping the list was the fact that the house was listed as built in 1985, but in fact was most likely constructed in the 50's-60's and then sawed in half and moved to the site in 85 complements of DOT money as a result of a major highway being put through the original neighborhood. So, the foundation was poured in 85, and it appears that most of the electrical and plumbing fixtures were updated and new siding was added at that time, but the majority of the construction is older. My agent called the seller's agent who insisted is was built in 85, but the inspector was adamant it was not 80's construction and some records digging by my agent's office revealed the truth.
Also, during the move they made some serious notches in joists and took out the entire center section of the main girder than runs under the center of the house. So, a pier is there going up into nothing with no beam above it at all right in the middle of the house, and the long central wall is basically holding the house up although the center is slowly sinking due to it's own weight. The inspector was so amused by this that he said he would likely post that photo on his website. There is also a structural issue with the roof. As this is a very small house, there is no cracking on the walls or ceiling to indicate this issue inside, nor is the floor badly sloped so you can tell without using a level (the rooms are small), and now I wish I had crawled on my belly into the very low crawl space prior to making the offer or at least brought a tennis ball to see how it rolls. Lesson learned there.
The numbers look reasonable but not spectacular with the deal I thought I was getting ($63K for the house plus $2-3k or even $5K for renovating, will probably rent for ~$800 at that point.) Talked to a PE today who thought the biggest structural issue would be several thousand to repair, but haven't paid him yet for a formal report. It will also likely increase the time to reasonable occupancy, pushing that into the Fall which is bad for this area (near a university, rentals need to be ready no later than Aug 1.) There were several offers on the first day this house was on the market and the seller took mine, but I'm not confident that they will make concessions. Should I cut my losses now rather than spending money on engineering reports, more inspections, appraisals, major repairs I wasn't anticipating, or should I hang in there to see what the seller can do for me?
Thoughts? I appreciate any insights, advice, or scolding you can offer.
If the house makes you uncomfortable, walk away. There will be other houses.
this sounds like a home to walk away from as fast as you can. If your inspector is amused at what he saw, you will definitely Not be amused. I would think that these major issues will lead to other problems that you have not uncovered yet. Best of Luck to You. Tom
Sounds like a money pit. Listen to the inspectors advice; your due diligence did you a big favor.
Turn around, walk away, don't look back.
Thanks, everyone, for your advice. I do have reserves to make big repairs, but I'd rather save those and look for a more sound investment.
My first instinct was to fix it because of course I've been thinking about how to update already, but then I start having these feelings last night to walk away since now in addition to what was obviously to the eye and then found underneath it seems like there could be lead paint, asbestos, and other older home issues lurking, and I appreciate you confirming that feeling. As Tom said, there are other houses. Thanks again!
One thing that jumps out in my mind is lead paint. It was banned at the end of 1977. If the house was built in 1985, you would know that it's lead free and no disclosures would be required. If it was actually built in the 50's-60's, there's a possibility of lead based paint.
If other buyers are (were) interested, let 'em have it. Spend your money on other things.
I have bailed on this one. Thanks, everyone, for your comments.
Back to the buying drawing board . . .
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