Friendly Advice Needed
Hi BP Community,
I don't post often in the forums but do actively read through them. I know there is a lot of knowledge and wisdom to be gained by such a great community, so I was hoping to get some advice on a current deal I'm in contract with. Sort of conflicted on what direction I should go.
Overview:
The purchase price of the house is $170K in which I negotiated down from $190K. This is a triplex with an option to also rent out the garage for storage. So multiple streams of income.
This is a rental town, hence I'll have an easy time getting tenants and it comes with 2/3 units already occupied.
With 25% down and fully rented out at maximum rent, should cash flow $1,000+ per month after taxes, principal and interest.
Dilemma:
Even though I was able to get the purchase price down to $170K, based on the comps in the area, I'm paying a fair competitive price, not a low price.
The house is about 100 years old. After the inspection report came back, the house will need the following work (and this comes directly from the inspector):
- 1-The two oil-fired boilers must be professionally evaluated and serviced by a licensed HVAC technician to determine the life expectancy and the evaluation of the firebox as well as its efficiency.
- 2-The asbestos in the basement must be professionally encapsulated or removed.
- 3-Need to have a licensed plumber REPLACE the corroding electric water heater for the rear unit.
- 4-All items listed in #8 that are asked to be replaced, should be professionally replaced or given appropriate credit for replacing by new owners.
- 5-Need to have a licensed electrician examine, address and replace all wiring throughout the house and garage. Due to the extended list of improper and outdated wiring mentioned in #10, we need an exact quote on how much it will cost to repair all electrical issues throughout the premises.
- 6-Must install all appropriate carbon monoxide/smoke detectors as needed all throughout the living area space; including basement, stairwells and other living areas.
Based on this report, I have asked the seller for an additional $10K at closing to make up for some of the costs I'll be incurring from the start. The seller is willing to give me only $5K right now and I'm trying to get them to come up to a minimum of $7,500.
Even if they agree to give me an additional $7,500 at closing, do you think this is a good deal to get involved with?
Please also not that I already spent $1,200 on the inspection and appraisal.
Any advice is greatly appreciated.
Thank you very much and have a great day!