I found what I think might be a good deal (it's a duplex in TN), but when I asked my agent to contact the other agent with questions, she sent back a seller's disclosure form that indicates there's a sinkhole on the property. I don't know where it is, how big it is, or if it's been repaired, but just a quick good search seems to indicate this could be a $25k repair.
Even if it IS repaired, I also read that just having the repaired sinkhole automatically reduces the value of the house by at least 10%.
I haven't pulled comps official comps yet, but just doing some self-assessment via Zillow with similarish homes sold in the last 6 months, this house already priced $25k lower than what those sold for (I say "similarish" because they were remodeled, had garages instead of being a duplex, etc.), which makes me think the sinkhole is NOT already fixed (this is a question I have out to my agent).
Other concerns - I know many people don't want to be investors in houses in flood zones b/c insurance expense is so high for the investor (while it's much more affordable for a owner occupied property) - is it similar for a sinkhole?
Other facts about the house:
Sales price $125k
Built in 1974, but burned down in a fire in 1995, so foundation is 40 yrs old, but house is about 20 yrs old.
Duplex - upstairs about 1,600 sq ft, downstairs about 1k sq ft. Upstairs was owner occupied, downstairs rented for $550, but with updates and a growing area, I think we could rent for $800 at least. Upstairs we could rent for $1,200.
Is it still worth pursuing or should I just walk away? Thanks!
How is the upstairs so much larger than the downstairs? Are there 600sqf overhanging somewhere?
@Michaela G. So it's on a slope. The downstairs is at the bottom of the hill, and the upstairs as rooms coming off of the 1k built directly on the basement apartment. It's a strange configuration, and I haven't gone to see the house yet, only saw pictures online.