Updated over 7 years ago on . Most recent reply
Negotiating U&O items with seller on an 8 unit
I have an 8 unit apartment building under contract. I already negotiated the sale price. We had our home inspector and also had our U&O Inspection’s (heat, chimney and electric). We found about $6000 in items that have to be fixed to comply with U&O and get our cert. We also found about $4500 in other items the inspector found (radon, 1 oven not working, a few small leaks, gutters clogged and on minor roof repair, done electrical and plumber work).
What is the best way to negotiate these items with the seller. I already have about $3000 into the deal for all the inspections, so I don’t want to walk away. It really is a very solid deal. Should we ask for a seller assist or should we try and have the seller repair all the items need to pass U&O? I don’t want to lose the deal, but also the additional expense of $10500 is tough to swallow .
The property is 8 units selling price is 575,000 rental income is 85,600 a year. I have analyzed the deal and it is a good deal. Positive cash flow every month of about $1600. Not many small multi unit apartment buildings for sale in my area. I want to try and scale up quickly so I feel my niche right now is 5-20 unit buildings. This one fits in perfect. Any help in best way to negotiate the unexpected expenses would be greatly appreciated.
Most Popular Reply
@Steven Hellinger , ask for a reduction to address the "deferred" maintenance items.
You can also highlight items the lender would want fixed.
Worst they can say is no. You then make the decision to proceed or not.
Show some flexibility in terms of closing date, etc.