I found a solid 2 flat in a good area on the south side of Chicago. The location is on a block with majority single family homes and close to transportation. Needs a little TLC but nothing major....well structurally at least. Second floor vacant and first floor is occupied by a long term tenant. I usually don't like taking on prior tenants but the numbers work well.
Problem is it is obvious evidence of roaches in the building. Typically that can be a little work to get rid of but manageable, with renovation, cleaning, and extermination. The dilemma is the long term tenant's lease is not up until the end of the year, and I'm positive the roaches will not be rid of until the tenant is gone.
Should I walk away from the deal or fight the uphill battle of managing the roaches. Cleaning up the second floor and not renewing the lease on the 1st floor. Leaving me with a hand full of months until I can get it fully cleaned out. It would cash flow great after.
If the numbers work then never mind the roaches. MANY south side properties have roaches, and if the tenants don't mind, why should you? Many people are very accustomed to roaches.
As you said, they can be gotten rid of if you have clean tenants and a regular pest control program. If you do go through with it, find an exterminator that is not commercial. I used Terminix and paid for a two year contract, and in a year they weren't able to get rid of roaches (they still use spray from the 1920s). I found a guy who used a gel/paste and roaches were gone in a matter of days.
Don't let insects run you away from a property. Termites? Yes. Roaches and other pests? No!
Ray is right Jeremy. I never realized how much I appreciated roaches until the bed bug problems started coming in a few years ago. Roaches can be killed pretty easy with a few aggressive treatments and ongoing preventative maintenance. Where roaches accumulate is in the stove and on the motor of the fridge so we have replaced older appliances before to remove a bulk of a similar issue. I have a good used appliance guy on the south side if you want to send me a PM. Another note, if the issue is as bad as you make it sound, after a couple of heavy treatments you will have a small cleaning project to complete the removal of the dead guys!
Roach insects can be killed . Roach tenants are much harder to get rid of
My concern would be with the long-term tenant that is willing to live with roaches. That's a big red flag for me.
I would deal with the roaches and then get rid of the long-term tenant as soon as legally possible.
@Jeremy Harris Definitely try to get a few opinions from exterminators regarding the cost and process involved dealing with the infestation. You may need to work this in your offer. Good luck!