​Should I go through with this deal? Relatively minor repairs??

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​Should I go through with this deal? Relatively minor repairs??

Jack B.
Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes

Based on comps look like it is valued between 450-480K.

I’m getting it for 355K but it needs roughly about 15-35K in work (15K on the low end, 35K on the high end if I fix the optional stuff and it costs more than estimated).

I figure even if I pour 30K into the property and it’s only worth 450K, I’m still coming out almost 70K ahead. Buying equity so to speak. Plus the cash flow is great, about 600 a month. And I’d still have money from my 1031 exchange to buy another deal.

Here are the needed and OPTIONAL repairs as well as their estimated prices:

-OPTIONAL Roof needs to be replaced in maybe 10 or so years, it has moss on it now but I can just clean that off for now, so I would say optional for the near term. 10-15K

-OPTIONAL: Two of the windows in the living room are failing and need to be replaced if I want people to be able to see through them (condensation stains on the inside of the panes). I estimate this to be 5k but optional. Two of the kitchen windows are slowly starting to do this as well but not much so far.

-OPTIONAL: Complete new garage door, it still works but is bowing: 2K

-House has no heating at all, tenant uses space heaters. The furnace is hooked up in a dangerous way to an exterior above ground water tank being used as an oil tank. No matter how much we tried to turn the furnace on, it wouldn't work, despite getting power: 10K to replace with electric on the high end.

-OPTIONAL: Insulation in attic is about non existent it's so thin: 2K to blow in insulation.

-Small amount of mold exists in MIL bathroom and laundry since no fan in bathroom and vent for dryer is not hooked up. House has asbestos/pop corn ceilings in the basement. Cost is negligible, maybe $500.

-OPTIONAL: all appliances in kitchen are stainless except for the fridge: 1K to get a stainless one, and I can sell the existing one to recoup some of that cost.

- The kitchen is a nice newish remodel, but the bathrooms are not entirely. There are small items like toilets that need to be replaced, shower door gaskets that need to be sealed, etc. $1K

-Basement carpet has some stains and is old office style carpet: 2K

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Mark S.
Real Estate Investor · Houston, TX · Member since 2016 · 142 posts · 79 votes
7y

Without seeing the proprety, my gut tells me that you won't get the ARV you're projecting unless you take care of a lot of the "optional" things. You may be trying to cheat yourself by artificially deflating your reno costs so your take home number looks better.

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  • Mark S.
    Real Estate Investor · Houston, TX · Member since 2016 · 142 posts · 79 votes
    7y

    Without seeing the proprety, my gut tells me that you won't get the ARV you're projecting unless you take care of a lot of the "optional" things. You may be trying to cheat yourself by artificially deflating your reno costs so your take home number looks better.

    2Reply
  • Jack B.
    OP
    Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Mark S.:

    Without seeing the proprety, my gut tells me that you won't get the ARV you're projecting unless you take care of a lot of the "optional" things. You may be trying to cheat yourself by artificially deflating your reno costs so your take home number looks better.

    So the house itself is mostly fine, just some minor cosmetic stuff. The big ticket items are the furnace and two windows. The roof will need to be replaced in probably 10 years or less. I get the whole 70% ARV calculation, but this isn't a full on remodel job. Just some prehab stuff for the most part other than a couple of major items.

    The house is in otherwise great condition.

    Plus I'm not planning on flipping it right now, so much as renting it out. Cash flow would be $500 a month+ not counting mortgage pay down. 

    I'd be 1031 exchanging from another rental into this one, so between this and another deal, I'll double my cash flow.

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  • Jack B.
    OP
    Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
    7y

    Even if I spent 40K on repairs which is VERY unlikely, I'd still have an ARV of at least 450K.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y

    seems OK to me  probably get a top shelf tenant..  if its a 400k home in a good area.

    I always back out 8 to 10% from ARV to get true equity.. so 450k X .92 = 414k - 390k looks like about 25k under market for your effort.. if your happy thats better than paying full retail and you would have to stroke a check to sell if you wanted to sell. or maybe not stroke a check but get back less than what your cash into it is.

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  • Matthew Paul
    Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    7y

    Ok here , a water tank holding heating oil ?    How loud should I shout  ENVIRONMENTAL NIGHTMARE ?   Get rid of that set up now .     My next question would be why was that jerry rig there , where is the original oil tank ?   i would want to know , because if its burried and has leaked  everything that was described for repairs would be cheap compared to a tank removal and soil clean up .

    1Reply
  • Jack B.
    OP
    Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Matthew Paul:

    Ok here , a water tank holding heating oil ?    How loud should I shout  ENVIRONMENTAL NIGHTMARE ?   Get rid of that set up now .     My next question would be why was that jerry rig there , where is the original oil tank ?   i would want to know , because if its burried and has leaked  everything that was described for repairs would be cheap compared to a tank removal and soil clean up .

     Yes, of course I would get rid of that jerry rig. 

    So there is an underground tank, I’m not sure what the deal with it is. They just told me it’s insured and it would carry over to me (the insurance) but I could get it decommissioned for 1.3K.

    I’m assuming there is something wrong with the oil tank under ground but I’m not sure. Since it’s a bankruptcy form 17 is not required. 

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  • Jack B.
    OP
    Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
    7y

    Something just seems off about this oil tank. Why have a temporary setup with an above ground tank when there is a below ground tank UNLESS the below ground tank is leaking....

    That's the only possible explanation I can think of. I think I'm going to walk. I called the number of the company that last serviced the underground tank and they couldn't give me any information other than the numbers of PLIA who insures these things and a company that fixes bad tanks. They thought that this setup was very suspicious as well and recommended a soil sample by a geologist...

    But they said even then, until the tank is pulled out to be decommissioned, we won't truly know if there is a leak or not.

    I'm leaning toward erring on the side of caution here...

    1Reply
  • Matthew Paul
    Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    7y

    @Jack B.  "they told you it was insured "  I would   get that in writing .   Me , I would have the tank  removed ASAP

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  • Jack B.
    OP
    Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
    7y

    Underground oil tank properties are ticking time bombs, they will all leak, it's a matter of when. Whoever does the soil sample and pulls the tank is on the hook for leakage. PLIA doesn't cover much. You can never get a true soil sample without removing the tank. Seller doesn't want to be on the hook for doing that and I'm not going to be their sucker either.

    https://www.trulia.com/voices/Home_Buying/We_are_buying_a_home_which_has_an_underground_oil_-120905

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  • Jack B.
    OP
    Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Matthew Paul:

    @Jack B.  "they told you it was insured "  I would   get that in writing .   Me , I would have the tank  removed ASAP

    It's verifiable via PLIA, but like I said, this is a nightmare waiting to happen. It's leaking, I'm sure of it, otherwise they wouldn't have a jerry rigged above ground tank.

    Check this thread. The guy is right, they all leak eventually, and even testing doesn't mean anything until the tank is removed and whoever removes it is on the hook for VERY expensive repairs not covered by the insurance....:

    https://www.trulia.com/voices/Home_Buying/We_are_buying_a_home_which_has_an_underground_oil_-120905

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Matthew Paul:

    @Jack B.  "they told you it was insured "  I would   get that in writing .   Me , I would have the tank  removed ASAP

     I would use this to hammer on price. oil tanks can be mitigated  and if its a foreclosure and OREO property many times they will get aggressive to move this type of inventory.  this is a common in issue in Older homes in Portland and I am sure Seattle area

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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    7y

    Either have them decommission and remove the oil tank or get a credit to have that done.  Many of the optional things are not urgent and can be done down the road.  

    The fridge, I'd leave until it needs to be replaced.  If you really want all stainless steel appliances (I'm in the minority, but I don't like them), sell the current one.

    For the heating, I bought a place where the furnace was dead.  The seller replaced it with a heat pump (and removed the oil tank from the old furnace).  I did add a baseboard heater in one room afterwards, but otherwise it does a good job heating (and cooling) the house.

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  • Jack B.
    OP
    Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Jay Hinrichs:
    Originally posted by @Matthew Paul:

    @Jack B.  "they told you it was insured "  I would   get that in writing .   Me , I would have the tank  removed ASAP

     I would use this to hammer on price. oil tanks can be mitigated  and if its a foreclosure and OREO property many times they will get aggressive to move this type of inventory.  this is a common in issue in Older homes in Portland and I am sure Seattle area

    If there is leakage, I'm on the hook for expensive environmental remediation though...Regardless of what price I get them down to. Even my agent said something seems fishy with this house.

    That underground tanks is obviously leaking, there is no other reason to put a jerry rigged above ground tank in.

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  • Dennis M.
    Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    7y

    2k to blow in insulation ? Geez that sounds ridiculous i did my attic with blown in cellulose and it was under 300 bucks .

    1Reply
  • Quito Keutla
    Real Estate Agent · Renton, WA · Member since 2017 · 204 posts · 151 votes
    7y

    @Jack B. I would agree with @Jay Hinrichs the tank can be a great negotiating tool, the banks would want to move the inventory.  The our imagination can be worse than the truth, do your research and go with the worse case to present your offer.  It's not uncommon to have older homes in the Seattle area with oil tanks.  Happy Investing!

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  • Jack B.
    OP
    Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Quito Keutla:

    @Jack B. I would agree with @Jay Hinrichs the tank can be a great negotiating tool, the banks would want to move the inventory.  The our imagination can be worse than the truth, do your research and go with the worse case to present your offer.  It's not uncommon to have older homes in the Seattle area with oil tanks.  Happy Investing!

    Yeah I have one rental house that has an underground oil tank but this is different, the seller has no form 17 since it's a foreclosure/bankruptcy sale. Also they have an above ground tank jerry rigged instead of using the underground tank. That HAS to be because it is leaking. The bank wont do any work to the property. I would only deal if they removed the tank before closing and they would not do that.

    I absolutely don't want to buy it and find out that I was right, that IS why they are using a temporary home made setup instead of the UST and end up being responsible for hundreds of thousands of dollars in cleanup.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Jack B.:
    Originally posted by @Quito Keutla:

    @Jack B. I would agree with @Jay Hinrichs the tank can be a great negotiating tool, the banks would want to move the inventory.  The our imagination can be worse than the truth, do your research and go with the worse case to present your offer.  It's not uncommon to have older homes in the Seattle area with oil tanks.  Happy Investing!

    Yeah I have one rental house that has an underground oil tank but this is different, the seller has no form 17 since it's a foreclosure/bankruptcy sale. Also they have an above ground tank jerry rigged instead of using the underground tank. That HAS to be because it is leaking. The bank wont do any work to the property. I would only deal if they removed the tank before closing and they would not do that.

    I absolutely don't want to buy it and find out that I was right, that IS why they are using a temporary home made setup instead of the UST and end up being responsible for hundreds of thousands of dollars in cleanup.

     ya I don't think a residential oil tank would ever cost that amount.. but if it was a deal I was looking at I would be excited I would figure it out during due diligence then lower my bid by 3X that amount or more.. but I certainly can see how if your not in the business its just a case of NEXT.. and move on

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  • Jack B.
    OP
    Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Jay Hinrichs:
    Originally posted by @Jack B.:
    Originally posted by @Quito Keutla:

    @Jack B. I would agree with @Jay Hinrichs the tank can be a great negotiating tool, the banks would want to move the inventory.  The our imagination can be worse than the truth, do your research and go with the worse case to present your offer.  It's not uncommon to have older homes in the Seattle area with oil tanks.  Happy Investing!

    Yeah I have one rental house that has an underground oil tank but this is different, the seller has no form 17 since it's a foreclosure/bankruptcy sale. Also they have an above ground tank jerry rigged instead of using the underground tank. That HAS to be because it is leaking. The bank wont do any work to the property. I would only deal if they removed the tank before closing and they would not do that.

    I absolutely don't want to buy it and find out that I was right, that IS why they are using a temporary home made setup instead of the UST and end up being responsible for hundreds of thousands of dollars in cleanup.

     ya I don't think a residential oil tank would ever cost that amount.. but if it was a deal I was looking at I would be excited I would figure it out during due diligence then lower my bid by 3X that amount or more.. but I certainly can see how if your not in the business its just a case of NEXT.. and move on

    It's great that you don't think it would ever cost that amount, but it's a fact, look it up. Tons of stories about cleanups that cost hundreds of thousands of dollars especially when the oil tank leaked into an aquifer. 

    You really think this one is not being used because it's not leaking? Why would they have an above ground DIY temporary setup unless the tank is leaking. I don't know how many times I have to post it before someone actually understands that...You guys seem to gloss over this despite the fact I've posted it no less than 3 times.

    I'm not sure what you mean about "not being in the business". I am in the business, I have a house that has OIL heat. A rental house. It wasn't a deal with a jerry rigged above ground tank because the underground one was leaking. I'll eventually sell the house. But this one is CLEARLY leaking, that's why they have a different home made setup. 

    If you want to go buy it, be my guest. But let's not assume that it doesn't cost that much to clean it up when it does in fact in many cases. 

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Jack B.:
    Originally posted by @Jay Hinrichs:
    Originally posted by @Jack B.:
    Originally posted by @Quito Keutla:

    @Jack B. I would agree with @Jay Hinrichs the tank can be a great negotiating tool, the banks would want to move the inventory.  The our imagination can be worse than the truth, do your research and go with the worse case to present your offer.  It's not uncommon to have older homes in the Seattle area with oil tanks.  Happy Investing!

    Yeah I have one rental house that has an underground oil tank but this is different, the seller has no form 17 since it's a foreclosure/bankruptcy sale. Also they have an above ground tank jerry rigged instead of using the underground tank. That HAS to be because it is leaking. The bank wont do any work to the property. I would only deal if they removed the tank before closing and they would not do that.

    I absolutely don't want to buy it and find out that I was right, that IS why they are using a temporary home made setup instead of the UST and end up being responsible for hundreds of thousands of dollars in cleanup.

     ya I don't think a residential oil tank would ever cost that amount.. but if it was a deal I was looking at I would be excited I would figure it out during due diligence then lower my bid by 3X that amount or more.. but I certainly can see how if your not in the business its just a case of NEXT.. and move on

    It's great that you don't think it would ever cost that amount, but it's a fact, look it up. Tons of stories about cleanups that cost hundreds of thousands of dollars especially when the oil tank leaked into an aquifer. 

    You really think this one is not being used because it's not leaking? Why would they have an above ground DIY temporary setup unless the tank is leaking. I don't know how many times I have to post it before someone actually understands that...You guys seem to gloss over this despite the fact I've posted it no less than 3 times.

    I'm not sure what you mean about "not being in the business". I am in the business, I have a house that has OIL heat. A rental house. It wasn't a deal with a jerry rigged above ground tank because the underground one was leaking. I'll eventually sell the house. But this one is CLEARLY leaking, that's why they have a different home made setup. 

    If you want to go buy it, be my guest. But let's not assume that it doesn't cost that much to clean it up when it does in fact in many cases. 

    by not in the business I mean your sole occupation is not buying renovating and reselling homes or building new construction .. that's what I mean.

    its OK that you are worried about the tank I have cleaned up many that leaked.. simply was not what you described..  

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  • Quito Keutla
    Real Estate Agent · Renton, WA · Member since 2017 · 204 posts · 151 votes
    7y
    Originally posted by @Jack B.:
    Originally posted by @Quito Keutla:

    @Jack B. I would agree with @Jay Hinrichs the tank can be a great negotiating tool, the banks would want to move the inventory.  The our imagination can be worse than the truth, do your research and go with the worse case to present your offer.  It's not uncommon to have older homes in the Seattle area with oil tanks.  Happy Investing!

    Yeah I have one rental house that has an underground oil tank but this is different, the seller has no form 17 since it's a foreclosure/bankruptcy sale. Also they have an above ground tank jerry rigged instead of using the underground tank. That HAS to be because it is leaking. The bank wont do any work to the property. I would only deal if they removed the tank before closing and they would not do that.

    I absolutely don't want to buy it and find out that I was right, that IS why they are using a temporary home made setup instead of the UST and end up being responsible for hundreds of thousands of dollars in cleanup.

    After  you do your due diligence and if the tank is still a concern for you, find nother deal.  There is plenty opportunities out there right now, do what you feel is in your best interest.  

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  • Jack B.
    OP
    Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Jay Hinrichs:
    Originally posted by @Jack B.:
    Originally posted by @Jay Hinrichs:
    Originally posted by @Jack B.:
    Originally posted by @Quito Keutla:

    @Jack B. I would agree with @Jay Hinrichs the tank can be a great negotiating tool, the banks would want to move the inventory.  The our imagination can be worse than the truth, do your research and go with the worse case to present your offer.  It's not uncommon to have older homes in the Seattle area with oil tanks.  Happy Investing!

    Yeah I have one rental house that has an underground oil tank but this is different, the seller has no form 17 since it's a foreclosure/bankruptcy sale. Also they have an above ground tank jerry rigged instead of using the underground tank. That HAS to be because it is leaking. The bank wont do any work to the property. I would only deal if they removed the tank before closing and they would not do that.

    I absolutely don't want to buy it and find out that I was right, that IS why they are using a temporary home made setup instead of the UST and end up being responsible for hundreds of thousands of dollars in cleanup.

     ya I don't think a residential oil tank would ever cost that amount.. but if it was a deal I was looking at I would be excited I would figure it out during due diligence then lower my bid by 3X that amount or more.. but I certainly can see how if your not in the business its just a case of NEXT.. and move on

    It's great that you don't think it would ever cost that amount, but it's a fact, look it up. Tons of stories about cleanups that cost hundreds of thousands of dollars especially when the oil tank leaked into an aquifer. 

    You really think this one is not being used because it's not leaking? Why would they have an above ground DIY temporary setup unless the tank is leaking. I don't know how many times I have to post it before someone actually understands that...You guys seem to gloss over this despite the fact I've posted it no less than 3 times.

    I'm not sure what you mean about "not being in the business". I am in the business, I have a house that has OIL heat. A rental house. It wasn't a deal with a jerry rigged above ground tank because the underground one was leaking. I'll eventually sell the house. But this one is CLEARLY leaking, that's why they have a different home made setup. 

    If you want to go buy it, be my guest. But let's not assume that it doesn't cost that much to clean it up when it does in fact in many cases. 

    by not in the business I mean your sole occupation is not buying renovating and reselling homes or building new construction .. that's what I mean.

    its OK that you are worried about the tank I have cleaned up many that leaked.. simply was not what you described..  

    And you somehow know for a fact that it's not going to cost more than just a few thousand with no soil sampling, with out even removing the tank, despite the fact that it's obviously leaking considering the DIY above ground setup they are using instead...Got it. Somehow without any actual facts you know the extent of the damage already.

    Let me bring some actual facts to this conversation. This lady was quoted 224K for cleanup and lost more than a million dollars.

    https://bc.ctvnews.ca/removal-of-backyard-oil-tank...

    And these people are looking at 200K, for which insurance may cover half.

    https://www.njtvonline.org/news/video/toxic-nj-the...

    Here is some more information:

    https://www.nytimes.com/1995/04/02/realestate/your...

    https://www.atsenvironmental.com/blog/leaking-abov...

    Bottom line, until that tank is pulled you have NO idea how bad the leak is or how much the cleanup is going to cost. It may cost 30K or it may cost 200K. Just because you're allegedly lucky so far doesn't mean you always will be.

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  • Jack B.
    OP
    Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Quito Keutla:
    Originally posted by @Jack B.:
    Originally posted by @Quito Keutla:

    @Jack B. I would agree with @Jay Hinrichs the tank can be a great negotiating tool, the banks would want to move the inventory.  The our imagination can be worse than the truth, do your research and go with the worse case to present your offer.  It's not uncommon to have older homes in the Seattle area with oil tanks.  Happy Investing!

    Yeah I have one rental house that has an underground oil tank but this is different, the seller has no form 17 since it's a foreclosure/bankruptcy sale. Also they have an above ground tank jerry rigged instead of using the underground tank. That HAS to be because it is leaking. The bank wont do any work to the property. I would only deal if they removed the tank before closing and they would not do that.

    I absolutely don't want to buy it and find out that I was right, that IS why they are using a temporary home made setup instead of the UST and end up being responsible for hundreds of thousands of dollars in cleanup.

    After  you do your due diligence and if the tank is still a concern for you, find nother deal.  There is plenty opportunities out there right now, do what you feel is in your best interest.  

    Agreed. This is in my best interest (walking away). Like I said I have another rental with a UST. NO issues. But it doesn't have an obvious leakage issue as indicated by this other deal I'm  looking at with the jerry rigged above ground setup, a clear indication the tank below is leaking (it's not even decommissioned). Unless the bank/seller remove the tank, I won't deal. Only an idiot would. Whoever pulls that tank is responsible for the cleanup. And just decommissioning it doesn't address previous leakage. I would still be exposed to the risk of cleanup costs if it at some point gets found out, like leaking into the aquifer nearby....

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y

    @Jack B.  Yup got it world is a risky place.. so if this is too much risk for you then pass like your going to do.

    however like I said in SFR small lot small tank remediation are generally not that massive of deals and

    its a great tool to hammer the lender in possession for a great price do the work and get the benefits. 

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  • Jack B.
    OP
    Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Jay Hinrichs:

    @Jack B.  Yup got it world is a risky place.. so if this is too much risk for you then pass like your going to do.

    however like I said in SFR small lot small tank remediation are generally not that massive of deals and

    its a great tool to hammer the lender in possession for a great price do the work and get the benefits. 

    Great, that's what I intend to do, but let's not attack me claiming it's not going to cost much based on YOUR limited experience that you claim and act like I'm making a mistake walking away when you don't actually know that for a fact and have little actual knowledge of the situation, are making HUGE assumptions, and on top of that, I've shown you documented proof that it DOES cost that much, counter to your claim that it 'simply doesn't cost that much' Jay....

    I don't care about hammering on price for this, I want the tank removed and if you read a bit, you'll find tons of people online who have asked the same of sellers and the sellers attorneys won't the sellers pull the tank...because they know the risk their client would face. 

    You're really gambling by pulling the tank yourself. It would be a mistake to get a 5K discount and end up with 30-200K in cleanup costs. Until the tank is removed no one knows how bad the damage is. You go ahead and keep on gambling, I'll stick with the known facts and mathematics of the risk involved.

    There is a 95%+ chance that tank has been leaking. No idea how bad how the damage is until it is pulled. The EMV is 28,500 to 190,000 based on the probability. I have no idea why anyone would hammer on a few thousand dollar (5K) price reduction when they are facing a guaranteed expense of 28-190K for cleanup at some point.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Jack B.:
    Originally posted by @Jay Hinrichs:

    @Jack B.  Yup got it world is a risky place.. so if this is too much risk for you then pass like your going to do.

    however like I said in SFR small lot small tank remediation are generally not that massive of deals and

    its a great tool to hammer the lender in possession for a great price do the work and get the benefits. 

    Great, that's what I intend to do, but let's not attack me claiming it's not going to cost much based on YOUR limited experience that you claim and act like I'm making a mistake walking away when you don't actually know that for a fact and have little actual knowledge of the situation, and on top of that, I've shown you documented proof that it DOES cost that much, counter to your claim that it doesn't Jay....

    I don't care about hammering on price for this, I want the tank removed and if you read a bit, you'll find tons of people online who have asked the same of sellers and their attorneys won't the sellers pull the tank...because they know the risk their client would face. 

    You're really gambling by pulling the tank yourself. It would be a mistake to get a 5K discount and end up with 30-200K in cleanup costs. Until the tank is removed no one knows how bad the damage is. You go ahead and keep on gambling, I'll stick with the known facts and mathematics of the risk involved.

    There is a 95%+ chance that tank has been leaking. No idea how bad how the damage is until it is pulled. The EMV is 28,500 to 190,000 based on the probability. I have no idea why anyone would hammer on a few thousand dollar (5K) price reduction when they are facing a guaranteed expense of 28-190K for cleanup at some point.

    Geez  Jack this is a public forum we all have our opinions.. I am not criticizing you for walking away you seem to take this stuff pretty personal.. I am just talking about how you or anyone reading this can make this a win instead of just rejecting it out of hand because you have no experience at it and just read worse case scenarios.  ..  other investors could look at this as a potential deal

    and like I said if your not in the business of doing major work to houses and or development etc etc.. its most likely not an appropriate thing for you to take on..  one can dig around the tank to get an idea before pulling it.. and I am not talking 5k  discount,. ???  

    but for sure during your due diligence you could reasonably ascertain what the extent of the clean up would be.. we are not talking about a 30k gallon gas tank or some Mill site .. 

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