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Updated almost 4 years ago on . Most recent reply
Any regrets for not heeding warnings in inspection report?
In the past few weeks, we've (our company) made offers to several SFRs and the inspection reports typically highlight "significant findings" that make us question whether to proceed with those deals or not. Some of those issues are not-so-serious foundation issues, pest infestations (potentially affecting the structure), wood rot in the basement/crawlspace, roofing issues, mold, etc. The logical approach is to schedule inspections with domain specialists, get a good sense of how much each of those items will cost and negotiate the price. However, it's been quite difficult to schedule inspections with all those specialists within a reasonable amount of time to get a sense of the cost involved.
With experience, estimating the cost of repairs for some issues becomes second nature. However, our assessment of the issue based on what's readily visible and the actual extent of damage could be quite different. If we try to be risk averse, we'd pass on these houses and potentially lose a good investment opportunity. On the flip side, if we purchase the property without a proper evaluation (by a specialist), we could end up footing a hefty repair bill.
We're interested in learning from the experienced investors about how to handle this situation. While we understand that there's no clear cut answer to what we should take a risk on and what we shouldn't (as it's very much on a case-by-case basis), what issues are you comfortable with making a decision on without consulting a specialist? And have you regretted such decisions and how did you handle such losses (insurance, fix and refinance, etc.)?
Thanks in advance.