I seemed to have hit the trifecta! I am in the process of putting an offer on a condo and the disclosure indicates lead paint (not too concerned about), mold from prior leak, and some asbestos. The mold and asbestos were mitigated by the HOA. We are in the process of obtaining more detailed information on the extent and mitigation so I don't currently have any specifics.
I am purchasing as my first rental with the intent of eventually remodel and sell. The remodel should be relatively easy but that is where my concern about disturbing the asbestos comes in. The margin on purchase may not be there to justify high costs of mitigation.
I need to decide whether to proceed or move on. Any thoughts/advice/suggestions appreciated. Thanks!
Those 3 issues probably create the most liabilities to a landlord. Not only do you have the high costs of mitigation, you also have to deal with the HOA.
Ultimately it is all about the numbers and your risk tolerance.
Lead paint is something you should be concerned about. In MA you can't rent to a family with children under 7 unless you have a lead certificate on file with the state.
I don't know the laws in CO but if they're similar, you will have to have the unit deleaded, which could be expensive.
I would suggest you find out the laws and use the fact that you will need to delead (regardless of the law, you should do it) to negotiate the purchase price. Find out the average cost of deleading out there and use that # in your negotiations. If it could cost $20,000, knock that off your offer, then negotiate up to you and them splitting the cost if they give you a hard time.
Thanks Derrick and Chris,
I decided to cancel the offer. We had not received any of the HOA info yet and had to make a decision based on our timelines. The inspection alone would cost close to $600 to include the additional asbestos and mold testing. It may have worked out OK but if it was present, the cost to migrate would put me at loss.
The owner is an elderly woman (whom I met) and she is not able of coming down at all in price and I understand that.
Your info was quite helpful, especially regards to checking the state laws - I am sure this won't be the first time I have to navigate this.
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