Is this a deal or no deal?

OP

Rental Property Investor · Alexandria, VA · Member since 2019 · 44 posts · 8 votes

5y

@Joe Villeneuve thank you that’s what I was thinking too

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Joe VilleneuvePro Member

Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes

5y

Originally posted by @Jaquette Green:

@Joe Villeneuve thank you that’s what I was thinking too

Let me ad this. In this market, everywhere, the norm appears to be overbidding rather than the seller accepting an underbid. That, and the lack of inspection clause looks like two red flags telling me there's probably a problem they don't want you to see.

8 Reply

Jonathan GreeneBusiness Member

Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes

5y

I agree with @Joe Villeneuve, you can't pass on inspections on your first investment. That's like buying a used car and not driving it or looking under the hood and just looking at the Carfax. You don't have to waive inspections to win, you can do inspections for informational purposes only (if they have it listed as-is) and then opt-out if you find more than you expected. A lot of times if you uncover something major, you are helping yourself by putting them on notice because then the agent, if it's listed, has to inform the seller and they know about an issue and must adapt to that, meaning everyone else will find the same thing.

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6 Reply

OP

Rental Property Investor · Alexandria, VA · Member since 2019 · 44 posts · 8 votes

5y

@Jonathan Greene thank you

OP

Rental Property Investor · Alexandria, VA · Member since 2019 · 44 posts · 8 votes

5y

@Joe Villeneuve yeah I agree

Bruce WoodruffPro Member

Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes

5y

@Jaquette Green

Let me ask you this - if you purchased this property (or the next one) without doing the inspection process and then found repairs that totaled $20k, would you be ok with that? Because you throw in a couple issues like foundation, electrical and plumbing, and you'll get to $20k really quick.....

3 Reply

OP

Rental Property Investor · Alexandria, VA · Member since 2019 · 44 posts · 8 votes

5y

@Bruce Woodruff I wouldn't be ok with that all! The picture is becoming clearer and clearer that I could save a lot of money and headaches by just getting an inspection.

Thanks

Bruce WoodruffPro Member

Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes

5y

Originally posted by @Jaquette Green:

@Bruce Woodruff I wouldn't be ok with that all! The picture is becoming clearer and clearer that I could save a lot of money and headaches by just getting an inspection.

Thanks

No prob....very few people are really capable of doing a walk-through and determining the true condition of a property. Maybe a seasoned General Contractor and maybe a really smart Investor/Realtor with decades of experience. Even most Home Inspectors are not that capable, I'd say less than 50%.

4 Reply

OP

Rental Property Investor · Alexandria, VA · Member since 2019 · 44 posts · 8 votes

5y

@Bruce Woodruff yeah I think I was just super excited and was willing to skip on the inspection but I see that’s more risk than I’m willing to take

Amy Raye Rogers

Real Estate Agent · Minot, ND · Member since 2021 · 131 posts · 223 votes

5y

I agree with all of the above comments. You want the inspection contingency. If anything is found during the inspection, it allows you the opportunity to negotiate additional concessions or back out of the deal. You're first deal doesn't have to be a home run, but you need to protect yourself until you get more comfortable. Good luck!

David F.

Member since 2018 · 113 posts · 135 votes

5y

I have a mentor/friend who says "your first couple deals are the most important." In REI, it's huge to get off to a good start, and you are taking a risk a by not doing an inspection contingency. I would not do it without an inspection (just like others have said). Also, if something pricey gets "discovered", now the seller knows as well, which is a benefit to them.

I like the 1% rule though. What has not been mentioned is getting a local investors opinion on the deal. Any chance you can reach out to somebody in your local network to see what they think about the deal? Offer them lunch, dinner, or something else so that you are creating a “win-win“ for their time and opinion.

OP

Rental Property Investor · Alexandria, VA · Member since 2019 · 44 posts · 8 votes

5y

@Amy Raye Rogers thank you I agree

OP

Rental Property Investor · Alexandria, VA · Member since 2019 · 44 posts · 8 votes

5y

@David Fern thanks I didn’t even think of doing that. I don’t know any in that area but I’m sure I could find some here on BP 🙂

Will GastonPro Member

Rental Property Investor · Columbia, SC · Member since 2010 · 1k+ posts · 2k+ votes

5y

@Jaquette Green My first question when looking at a townhome:

What kind of shape is the HOA in?

If I could only choose one, I'd rather inspect the financials of the HOA than on the actual townhome. This could go sideways real quick if there is a ton of CapEx and/or deferred maintenance.

Tons of "investment" townhomes/condos in my market are only good at one thing....feeding HOA budgets.

3 Reply

Jim Holub

Brighton, CO · Member since 2013 · 20 posts · 9 votes

5y

@Jaquette Green I’m looking for my first deal too and personally there is no way I would consider this deal. Just a newbies opinion.

Account Closed

Handyman · MN · Member since 2020 · 92 posts · 46 votes

5y

International Property Maintenance Code. IPMC from ICC. You can buy the outdated ones on Amazon for 10-15 usually, and I promise they are almost as exciting to read as an obituary.

But, if you can make a list or remember to check a few of the bigger things it will help you decide if it's even worth paying $500 to have it inspected. The first realtor I worked with got mad at me for fidgeting with the thermostat, pulling on handrails and wiggling the toilets. What's the point in looking at the rest of the place if you're not living there?

Plus, nothing makes your code enforcement staff happier then when you can show your making an honest attempt to keep your rental properties up to standard.

Scott M.

Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes

5y

Asking the wrong question. Doesn't matter if I would do this deal or not. This is your first deal and no, you should not on your first deal and frankly most investors would never consider buying w/o even on the 100th deal. But no, you should not move forward. If your realtor suggested and supports you not doing the inspection you should also fire them and work with someone who is more concerned about supporting you. The simple fact that the seller accepted your deal under asking price (unless it is really inflated) is a giant red flag. The fact that the seller would require no inspection is 10 red flags.

If I were your agent I would tell you to walk from this deal, regroup and start over. Sellers red flags are to many for a first time investor. Maybe the inspector catches something, maybe the seller has hidden it well enough but they are sure sending signals something is wrong. Inspectors are not perfect, they miss things too.

3 Reply

OP

Rental Property Investor · Alexandria, VA · Member since 2019 · 44 posts · 8 votes

5y

@Will Gaston surprisingly there's no HOA but the neighborhood is nice. It's a mixture of SFH and townhomes.

Thanks for the input I will consider that when looking for homes with an HOA tho

OP

Rental Property Investor · Alexandria, VA · Member since 2019 · 44 posts · 8 votes

5y

@Jim Holub thanks Yeah I was moving with emotion (excitement) and left my logical mind behind hehe

OP

Rental Property Investor · Alexandria, VA · Member since 2019 · 44 posts · 8 votes

5y

@Nate Mur thanks good info

OP

Rental Property Investor · Alexandria, VA · Member since 2019 · 44 posts · 8 votes

5y

@Scott M. Thanks yeah it’s crazy how once I stepped back the red flags were flying in all directions

Marlon Messer

Rental Property Investor · Pasadena CA and Southeast TX · Member since 2012 · 10 posts · 10 votes

5y

It is easy to get excited about purchasing your an investment, but the fact that you are taking action to purchase your first rental is a step in the right direction, even if you don't buy. All the above comments are great regarding the inspection.

It appears you are relying heavily on your agent and that you have not personally visited the property. What experience does your agent have with rental property and how well do you know the agent? An experienced agent should be able to recommend an inspector or GC to walk the property. Also, where did you get the rent data?

A video is nice to see the exterior but it could be lipstick on a pig with lots of expensive issues hidden beneath the service. In my opinion your first deal needs to be within driving distance so you can get 1st hand experience in the entire process of buying, renovating, renting your first rental.

Again, you are definitely moving in the right direction in trying to take down your first property. Good luck

David NutakorPro Member

Rental Property Investor · Palmdale, CA · Member since 2016 · 122 posts · 88 votes

5y

@Jaquette Green, cracked window and non-uniform floor could be a foundation issue. Note that foundation problems are expensive to fix, so l agree with others that you should do an independent inspection of the property and look for something else if this property doesn’t work well for you. Good luck on your first deal.

OP

Rental Property Investor · Alexandria, VA · Member since 2019 · 44 posts · 8 votes

5y

@Marlon Messer lol lipstick on a pig nice one!

She doesn’t have much experience with rental properties but in her defense she did tell me this was an off market deal that she found out about.

You know what I think I will actually take you advice on getting a deal closer to where I live. I’ve tried going further out to areas due to the cheaper housing market but it seems to be a lot more challenging than I thought.

I appreciate your advice.