Consider buying an existing short term rental

Consider buying an existing short term rental

Member since 2024 · 26 posts · 8 votes

Dear BP community, 

I am currently evaluating a property for purchase, and the listed bedroom/bathroom (s) count does not match with the county records. Also, the original septic is built for a 2-bedroom/1 bath home, but now the sellers have added another 3 beds and 3 baths. The sellers are not interested in updating the county's records or getting the septic expansion done. Are these a deal breaker/walk away or negotiate.  Your feedback is much appreciated. Thank you! 

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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
1y

What if the county/city will not approve a bigger septic tank? I'd find this out.

This would be a deal breaker if the city doesn't at leave put in writing that you can legally put in a bigger Septic tank to accommodate the bedrooms that have been added.

Also was the increase in house size done legally since they weren't required to upsize the septic tank? Maybe they didn't have proper permits? 

Lots of questions I would want the answers to.

See this reply in the discussion

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  • Member since 2024 · 26 posts · 8 votes
    1y
    Quote from @Michael Baum:

    Hey @Raghavendra Pillappa, late to the party here but everyone said it best.

    I wouldn't move forward on this until you find out all the details on if the septic can be expanded and if things were done correctly to add the bedrooms. Need to be permitted and I am going to say it probably wasn't.

    If the septic is only for a 2/1, then the county/city wouldn't approved the expansion as the current septic doesn't work for it.

    Most likely this would be a pass.

    Hello Michael, 
    Not late at all. I have the same feeling that even though the listing with number of bedrooms and the location sounds great on paper. Looks like these were undertaken under the radar and i am more inclined to pass, unless the seller is able to fix them all which is highly unlikely. Appreciate the input and i am more certain today than yesterday about my next steps. Thanks a million !
  • Member since 2024 · 26 posts · 8 votes
    1y

    There is always a risk in everything. But lowest risk with conversely high returns might still be worthy to try. 

  • New to Real Estate · Miami, FL · Member since 2024 · 1k+ posts · 466 votes
    1y

    Raghavendra,

    This is a major red flag. The septic system isn’t built for the extra bedrooms/bathrooms, which could lead to legal and functional issues. The seller’s refusal to update records or expand the system makes it riskier. Check with the county to see if expansion is possible, if not, the extra space may not be legally usable.

    If the deal still makes sense after factoring in potential costs, negotiate a discount. Otherwise, walking away is likely the smarter move. Let me know if you need help with financing on a better deal. Best, Drago

  • Member since 2024 · 26 posts · 8 votes
    1y
    Quote from @Drago Stanimirovic:

    Raghavendra,

    This is a major red flag. The septic system isn’t built for the extra bedrooms/bathrooms, which could lead to legal and functional issues. The seller’s refusal to update records or expand the system makes it riskier. Check with the county to see if expansion is possible, if not, the extra space may not be legally usable.

    If the deal still makes sense after factoring in potential costs, negotiate a discount. Otherwise, walking away is likely the smarter move. Let me know if you need help with financing on a better deal. Best, Drago

    Thank you Drago for helping to understand these smaller but potentially big issues down the lane. I am going to check with county anyway as it costs me nothing other than some time. Appreciate you taking a look. 
  • New to Real Estate · Miami, FL · Member since 2024 · 1k+ posts · 466 votes
    1y

    Sure, happy to help!

  • Developer · Moscow Idaho · Member since 2024 · 224 posts · 143 votes
    1y

    Ask off as much as you need to be safe.  If you don't get it, walk away.  There is always another deal.  Don't be emotional, just rational.  Real Estate is a safe, stable investment that makes you money in the long term.  

  • Member since 2024 · 26 posts · 8 votes
    1y
    Quote from @Drago Stanimirovic:

    Sure, happy to help!


     Thank you!

  • Member since 2024 · 26 posts · 8 votes
    1y
    Quote from @Matthew Becker:

    Ask off as much as you need to be safe.  If you don't get it, walk away.  There is always another deal.  Don't be emotional, just rational.  Real Estate is a safe, stable investment that makes you money in the long term.  

    I am on it, but the sellers are not flexible, and they are ahead in this STR game. Great advice, to stay practical! 
  • Developer · Moscow Idaho · Member since 2024 · 224 posts · 143 votes
    1y

    walk and buy the house next door and compete 

  • Member since 2024 · 26 posts · 8 votes
    1y

    Like the enemy method referred by Avery Carl. 

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