Help! My deal may be falling through
Hi All!
Not sure if there is anything I can do to save this- but being new to REI would love some opinions.
Me: New investor here, found a great deal on a two family in the greater philadelphia area, shortly after seeing it my husband and I put in a cash offer which was subsequently accepted. Love this property for a few reasons-
1. Cash on cash return around 14.8%
2. Extremely high potential cash flow
3. While the place needs a bit of work, it's nothing major, some electrical/plumbing upgrades + Plaster, floor in only one room, baseboards, window frames, but really not a huge amount- Inspection was conducted and went well overall
4. Comps and area rents all checked out
We ran into a few issues when we went under contract. The first red flag, the seller misrepresented the current tenant status saying she had two leases in place, when actually she had no leases in place. To mediate I requested that we add an addendum giving us an out if the tenants did not vacate the property prior to close, the seller signed the contract and maintained the tenants would be out.
Last week, we conducted inspection, sent a response to inspection asking for some updates on a few safety issues. Honestly, even if they don't make any of the updates I am still comfortable moving forward with the deal because I am buying it enough under value to just do it myself when I do the renovations.
Response to inspection was due on Tuesday, they did not comply, or respond. On Wednesday night, they responded they won't do anything (Fine) but also they are "Not sure if the tenants will move out after all" *Obviously a deal breaker.
My realtor recommended we walk away from the deal now, and that the seller and listing agent have both been pretty unresponsive and dishonest about the status of everything, which doesn't bode well.
My inclination is I don't walk away unless they can confirm in fact that the tenants will NOT move out (That is a deal breaker, these are not quality tenants that I want to inherit)- and despite we were planning to close Feb 6, we could give it a bit more time. I feel like my realtor is being a little quick to give up, and i have nothing to loose contractually to give this a little more time to see how it plays out (My deposits are still refundable at this stage and it's only $2500)
Any advice?