Rental Property Investor · Salt Lake City, UT · Member since 2020 · 29 posts · 11 votes
Hey everyone! I’m looking to close on my first rental in the Salt Lake area. I had done TONS of research, read several books, listened to podcasts etc... so I felt prepared to jump in. Started making offers that worked for my numbers. Got an offer accepted and the inspection done. Then the report caught me off guard. I realized I don’t know ANYTHING about the construction/contractor side of this. What is your advice on making sure I’m not investing in a bad property? I’ve thought about reaching out to a contractor and paying him to go over the report with me but now I’m down to only a few more days before losing my earnest money.
Attorney · Phoenix, AZ · Member since 2019 · 28 posts · 21 votes
6y
JC,
Did you go through the report with your inspector? If not, you should. Ask him or her what items are most concerning in their opinion. Assuming you trust your inspector, that's a starting point to analyze your risks. I generally start by talking with my inspector then on his recommendation I reach out to the appropriate vendors (HVAC, roof, etc.). Given that you have only a few days I would absolutely start by talking to your inspector and if he/she recommends it, get a more specialized opinion asap. Good luck!
I would call a real estate agent and have them go over it with you. Everyone knows a few and pay them for their time. What you are really looking for are big money items. Everything can be fixed but for how much. Don't bother about the little items but concentrate on the large money items so you know if you want to proceed with the transaction or if you have the opportunity ask the seller to pay for them. Don't ask for them to fix the items, ask for cash so you can do it right and not the quick, easy, and cheap route that sellers will do. The best way to do it is to put it towards your closing costs or else it will put up red flags with your lender.
Attorney · Phoenix, AZ · Member since 2019 · 28 posts · 21 votes
6y
JC,
Did you go through the report with your inspector? If not, you should. Ask him or her what items are most concerning in their opinion. Assuming you trust your inspector, that's a starting point to analyze your risks. I generally start by talking with my inspector then on his recommendation I reach out to the appropriate vendors (HVAC, roof, etc.). Given that you have only a few days I would absolutely start by talking to your inspector and if he/she recommends it, get a more specialized opinion asap. Good luck!
Salt Lake City, UT · Member since 2018 · 219 posts · 182 votes
6y
Several good points have been made above. I would ask for repairs or concessions if there is something that is a big concern to you. If the inspection shows it needs a new roof in the near future , siding, meth, radon, whatever it is. I typically get estimates and ask for a price reduction accordingly. Sometimes it works, sometimes you agree on half and sometimes they don’t budge. However it never hurts to ask. If it’s something the seller won’t repair, increase concessions or decrease purchase price and the numbers no longer work, then walk away. Though you can typically come to an agreement that works for everyone.
Rental Property Investor · Salt Lake City, UT · Member since 2020 · 29 posts · 11 votes
6y
@Dan Gauthier I was out on a business trip when the inspection was done, unfortunately. That being said I will touch base with him immediately. I did find a General Contractor to go over it with me today too so I’m feeling better