Take the deal or get out?

Atlanta, Georgia
Real Estate Deal Analysis & Advice
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Take the deal or get out?

Esei Igbinedion
Member since 2025 · 4 posts · 1 vote

I found an out of state investment property (I live in DC) in Powder Springs, GA. While I lived 20 years in GA, I’m not as familiar with the powder springs area but between my realtor and some research on my own, the numbers show this property has a small positive cash flow, even with hiring a property manager. Negotiated to $180k from $195k. Got the inspections in and am admittedly shocked by all the issues. A lot of them (65) labeled as marginal issues and 2 labeled as significant issue, one is the roof. The roof was supposed replaced last year but inspection came with gaps, no active leaks and potential past moisture damage (water marks in the attic). I hired a separate roofer to do a separate inspection and he believes it has about 3 to 5 years of life. This differs from the handyman my realtor know, who quoted 7-10 years. Not sure who to believe at this point. The roofer quoted $800 to patch it up now and make minor updates to keep the life of the roof but $7k to replace the whole thing 3 years down the line if I choose. Would you take this deal? 

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  • Danny Fuentes
    Member since 2025 · 2 posts · 0 votes
    1y

    Hello Esei, what is your goal? Do you have the capital to invest in a property that will need some repairs upfront and only return a little cash flow for now? Is it in a market with strong upside potential after you fix it up?

    A few other things to consider:

    • Roof/CapEx: Even if you patch it now, you’ll need to budget for a full replacement in 3–5 years. Does that fit into your reserves?
    • Inspection Report: With 65 marginal issues, have you factored in the cost to address at least the most urgent ones beyond the roof?
    • Cash Flow vs. Risk: If cash flow is already tight, any unexpected repairs could quickly turn this into a negative cash flow property.
    • Exit Strategy: If you had to sell in 2–3 years, would the area’s appreciation cover your costs and give you a cushion?

    If the deal only works under perfect conditions, it may not be the right one. But if the upside (market growth, equity build, future rents) outweighs the short-term headaches, it could still be a strategic play.

    0Reply
    • Esei Igbinedion
      OP
      Member since 2025 · 4 posts · 1 vote
      1y
      Quote from @Danny Fuentes:

      Hello Esei, what is your goal? Do you have the capital to invest in a property that will need some repairs upfront and only return a little cash flow for now? Is it in a market with strong upside potential after you fix it up?

      A few other things to consider:

      • Roof/CapEx: Even if you patch it now, you'll need to budget for a full replacement in 3–5 years. Does that fit into your reserves?
      • Inspection Report: With 65 marginal issues, have you factored in the cost to address at least the most urgent ones beyond the roof?
      • Cash Flow vs. Risk: If cash flow is already tight, any unexpected repairs could quickly turn this into a negative cash flow property.
      • Exit Strategy: If you had to sell in 2–3 years, would the area’s appreciation cover your costs and give you a cushion?

      If the deal only works under perfect conditions, it may not be the right one. But if the upside (market growth, equity build, future rents) outweighs the short-term headaches, it could still be a strategic play.

      Thanks for your response! The immediate issues that would need to be addressed would run about $1200. I do have reserves to cover the roof if needed to either now (but preferably later). The appreciation rate for the last 5 years has annually been about 12% annually. My very conservative estimate of long term rentals in the area is $1600 for this type of townhome (realtor estimates closer to $1850). The interior was recently updated with new floors, dishwasher, hvac, and water heater.
      0Reply
  • Jules Aton
    MD/DC · Member since 2024 · 1k+ posts · 1k+ votes
    1y

    I’m surprised you don’t stay local. MD suburbs have opportunities to do more than small positive cash flow while also being able to closely monitor your investment. 

    0Reply
  • Michael SmytheBusiness Member
    Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
    1y

    Who told you the roof was replaced last year?

    If it was the seller, what else are they misrepresenting?

    Logical Property Management4.9453 Reviews
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    • Esei Igbinedion
      OP
      Member since 2025 · 4 posts · 1 vote
      1y
      Quote from @Michael Smythe:

      Who told you the roof was replaced last year?

      If it was the seller, what else are they misrepresenting?

      Thanks for response. It was in the seller disclosure.
      0Reply
  • Don KonipolBusiness Member
    Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
    1y
    Quote from @Esei Igbinedion:

    I found an out of state investment property (I live in DC) in Powder Springs, GA. While I lived 20 years in GA, I’m not as familiar with the powder springs area but between my realtor and some research on my own, the numbers show this property has a small positive cash flow, even with hiring a property manager. Negotiated to $180k from $195k. Got the inspections in and am admittedly shocked by all the issues. A lot of them (65) labeled as marginal issues and 2 labeled as significant issue, one is the roof. The roof was supposed replaced last year but inspection came with gaps, no active leaks and potential past moisture damage (water marks in the attic). I hired a separate roofer to do a separate inspection and he believes it has about 3 to 5 years of life. This differs from the handyman my realtor know, who quoted 7-10 years. Not sure who to believe at this point. The roofer quoted $800 to patch it up now and make minor updates to keep the life of the roof but $7k to replace the whole thing 3 years down the line if I choose. Would you take this deal? 

    I’ve never purchased a property that the seller was willing to “discount” off of FMV that DIDN’T have capex issues.  The only questions are how big are the issues, and if the seller is willing to do repairs or adjust the price.  
    Sounds like someone confused “repaired” last year with “replaced” last year.  If “replaced” was stated in the listing or appeared in any “advertising” you have a strong basis for bringing it to the attention of the seller and demanding a price adjustment.  If it was something your Realtor stated offhand that they heard from the sellers realtor, then it’s just a “miscommunication”.  

    Private Mortgage Financing Partners, LLC
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    • Esei Igbinedion
      OP
      Member since 2025 · 4 posts · 1 vote
      1y
      Quote from @Don Konipol:
      Quote from @Esei Igbinedion:

      I found an out of state investment property (I live in DC) in Powder Springs, GA. While I lived 20 years in GA, I’m not as familiar with the powder springs area but between my realtor and some research on my own, the numbers show this property has a small positive cash flow, even with hiring a property manager. Negotiated to $180k from $195k. Got the inspections in and am admittedly shocked by all the issues. A lot of them (65) labeled as marginal issues and 2 labeled as significant issue, one is the roof. The roof was supposed replaced last year but inspection came with gaps, no active leaks and potential past moisture damage (water marks in the attic). I hired a separate roofer to do a separate inspection and he believes it has about 3 to 5 years of life. This differs from the handyman my realtor know, who quoted 7-10 years. Not sure who to believe at this point. The roofer quoted $800 to patch it up now and make minor updates to keep the life of the roof but $7k to replace the whole thing 3 years down the line if I choose. Would you take this deal? 

      I’ve never purchased a property that the seller was willing to “discount” off of FMV that DIDN’T have capex issues.  The only questions are how big are the issues, and if the seller is willing to do repairs or adjust the price.  
      Sounds like someone confused “repaired” last year with “replaced” last year.  If “replaced” was stated in the listing or appeared in any “advertising” you have a strong basis for bringing it to the attention of the seller and demanding a price adjustment.  If it was something your Realtor stated offhand that they heard from the sellers realtor, then it’s just a “miscommunication”.  

      Hi @Don Konipol the seller presented the roof info in a disclosure. Nothing official, just a typed up document stating the roof and a few other items were recently replaced.

      0Reply
  • Patrick DruryBusiness Member
    Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
    1y

    @Esei Igbinedion
    If there are water marks in the attic, check with the seller and see if they replaced the sheeting. Maybe they didn't replace the OSB so it's possible it's a previous leak prior to them fixing it. Also, we have no photos so it's very possible as well that the roof just wasn't replaced. Hard to say without looking at it or having an inspection report 

    [email protected]614-412-4565
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