mfh 1/6 units has bedbugs - would you buy?

Question

What would you do?

Considering a 6 unit property. Currently rented and has great cashflow but upon walk through we learned that one unit has bed bugs and the current owner isn't doing anything to remediate. Would you purchase? I've never had to deal with bed bug remediation so I don't know how realistic it is to get rid of them. Also concerned about it spreading. Anyone have experience with this?

Roy N. · Answer

Janel:

We just went through this very scenario ... with a 6-unit building coincidentally.

Similarly, the Vendor "failed" to disclose the bed bugs, but a little bird (tenants) told us all about them ... but we did not learn of the issue until a day or two before we were schedule to Close.

I've danced with bed bug before and a building of this size could run 10-15K if there was an infestation throughout the building.

So we basically told the Vendor we would hold-back X-amount of the purchase price until we had our pest control fellow go through the building and give it a clean bill.   If bed bugs were found, we would use those funds to pay for the treatment to eradicate them and any residual would be released to the Vendor once there were no more bugs (90 days after treatment).

Mindy Jensen · Answer

@Janel F. , if one unit has them, all 6 have them. Plan to remediate the entire building.

Will Chamberlin · Answer

@Janel F., I have had to remediate on a fully occupied duplex before. It cost me over $3k. We used a company that basically baked the entire building @ 120 degrees (if I recall correctly) for the whole day (maybe 6-8 hours?). The tenants had to vacate and take every candle/aerosol/flammable item with them.

The daughter of one tenant brought them in on a mattress then they tried to kill them with hotshot which just chased them to another apartment. Once remediated the company put some sort of impermeable case around each mattress and placed traps under all the beds to see if they came back. Fortunately that was the end of it but I would foresee the cost to be around Roy's estimate and it could be tougher to coordinate 6 tenants vs my 2.

I don't think that it should kill the deal, though. You need to figure out a way to make sure you are covered. Sounds like you would be better off with your guy handling instead of relying on anything from the seller, though. And of course you could lose the cost of remediation if the deal falls through by performing prior to close. Since you know of the issue maybe get the estimate and reduce the offer by that +20% the cost to be safe. Good luck!

Patti Robertson · Answer

We've used the same remediation technique as @Will Chamberlin about 6 times.  In all but one instance, the bedbugs were gone in one treatment.  I'm sure in the one case they weren't the tenant didn't follow proper instructions regarding what they  brought back in after treatment.  This wouldn't be a deal killer for me either, but I would reduce the purchase price by the treatment amount.  If you are going to landlord in any quantity, you need to have a good bedbug remediation company in your back pocket.  In my case we don't use our usual bug guys.  They don't have the equipment and want to use chemicals and dogs.  We have a landlord in town who got tired of spending the big money and bought the heat treatment equipment herself.  She will load everything into her box truck and treat it if necessary to ensure a tenant moving in doesn't bring bugs into our property. She has the tenants remove all the plastic and take out a change of clothes and shoes, which she treats in a small box that she leaves outside the house before they leave for the day.  They are instructed to bring the clothes and shoes they are wearing back in the bag and then she treats those before they go inside.  Works like a champ if done right.

Check your state regulation.  In Virginia landlords are now required to treat for bedbugs immediately. If you can prove the tenant brought them in you can ultimately hold them accountable, but it is the landlords obligation to get the remediation done.

Cheryl Butler · Answer

Thanks for the post Roy. I am in contract to purchase a duplex and just found out that the building is being treated for bedbugs. It hadn't occurred to me to ask that the seller escrow money for additional treatments if needed until I read your message.

I manage commercial office buildings, and we get bedbugs in call centers all the time. We make the tenant pay for the treatment, since regardless of who brought them in it was one of their employees. Multi-family is trickier.

Janel F. · Answer

@Roy N. Good info. Thanks for this!

mfh 1/6 units has bedbugs - would you buy?

Most Popular Reply